I start by finding out what the memory configuration of the machine is in terms of banks and occupancy.
If you have two banks, and the current configuration is one bank with 512MB and one bank empty, I'd probably go for 2GB in the first bank, move the 512MB to the second bank and see how you get on. The extra expense for changing that second bank to 1GB instead of 512MB is probably going to produce little, if any, benefit.
The Dell I mentioned has four slots - but the memory arrangements is pairs of identical DIMMs. There's only two banks.
The factory memory was 1GB, but I specified that should be in one bank (2 x 512MB rather than 512MB in each bank, which would have been 4 x 256MB and was a bit cheaper). Eventually I bought a Kingston 2GB kit (2 x 1GB) so I now have 3GB of RAM in the machine - 2GB in the first bank (2 x 1GB) and 1GB in the second bank (2 x 512MB - the original RAM Dell supplied). The most the motherboard will take is 4GB, but the benefit in buying a second 2GB kit and tossing the factory 1GB bank was likely to be minimal and not worth the expense.
I know nothing about Macs, but be careful. You're talking about 2GB kits made of 2 x 1GB. If your Mac has a similar memory arrangement to my Dell, fair enough. However, if the arrangement is that each bank consists of a single DIMM, and there's only two banks, you'll remove the factory 512MB, put 1GB in each bank, and have no further memory expansion potential.
Unless the cost is stupid, I tend to buy larger memory modules for future expansion potential, though on some motherboards there's a speed gain by spreading memory across all the slots. You have to weigh up cost, performance and future expansion potential.
My limited research on the Core 2 Duo iMacs indicates that the setup is simpler than my Dell - there's two independent slots, with a limit of 2GB per slot and 3GB total. If you can get a single 2GB module relatively cheaply, I'd do that, and move the factory 512MB to the second slot. If you ever find yourself hankering for the final 512MB that you can get in the machine, buy a 1GB DIMM and swap it for the factory 512MB - but I doubt you'll miss that 512MB very much.
David