As Skadi indicated. It means that if you want 1gb total, you should install two 512mb sticks. If you want 2gb, install two 1gb sticks.
In addition, if the RAM already in the machine is PC2700, your new RAM should also be PC2700.
If your new module is a 1GB module, just use that one in slot 1 and leave the other one out. If that works properly, try adding the old module in slot 2. Personally, I have never had any problem mixing RAM sizes, and I've been doing this since 1991.
Note that in your computer, RAM slot 1 and RAM slot 2 are
not adjacent. The slots are paired as 1 & 3 and 2 & 4. If you have only two modules, they go in slots 1 and 2.
The module connector strip is keyed, so it fits only one way. Make sure not to try to force it in backward. The module is fully seated when the retaining clips snap into position. On some motherboards, this requires more force than might seem safe.
Make sure you didn't accidentally buy an ECC module.
The free utility
CPU-Z is useful for identifying the components in your PC, including motherboard, CPU, and RAM.