memory issues with freesbie 2.0

My objective was to create a custom live cd with two additional ports 
added, which was achieved. ISO created is appx 190MB. This is on a 
laptop with 1.2GB ram. 

Now, when I attempt to work (open) files larger than about 20MB, I 
believe I exceed the "Ram disk", if that is the right word. 

Thinking that my laptop with 512MB Ram was insufficient, I installed 
an extra 768MB to give me 1.2GB ram. 

However, the livecd does not see the new ram, and making another 
livecd after adding the ram does not help.

Could someone please advise this newbie on solving this problem? Do I 
need to tweak the conf file? 

Thanks in advance,
Steve. 

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