no, the former is more rare...usually if there are bad sectors on your ram, your computer will bypass them and not use them...if there's a bad socket on your mobo, you bios will prolly not detect there is a ram stick in there and just pretend there isnt so it dont matter...
smeghead, if your only question is how much ram XP supports then Lonman answered that (I think the absolute max is 3Gig but it could be higher).
If your real question is why you got a blue screen after adding ram then you need to provide more info to assist people in helping you.
Did XP run fine until you tried to add additional memory? What are the specs on the memory modules that you are using? Does the BIOS accurately recognize the memory? What are the exact error msgs that you are getting from Windows? The more detailed info you provide the easier it is for people to try to help you.
This is probably late now but I had a BSOD with XP which was down to bad RAM. I built myself a P4 system and at first I thought the MOBO was buggered. Low and behold the second board produced the same errors so I then looked at RAM which proved to be the fault.