"Physical Memory is limited to 256 MB"
In the bios there is an option to install OS, make sure this is flaged as off, when you reboot you will have access to the full amount of onboard ram.
In the bios you have enabled the os install mode which limits the memory to 256mb. This is because some O/S's don't like more than 256mb.
A minimum of 256 MB of system memory. To add additional system memory, install identical pairs of DDR SDRAM DIMMs in the six DIMM sockets on the system board,max 6Gigs.If you install more tha 256 and you only see 256 try upbating the bios.
Good luck
Dell servers must have matching RAM sticks in banks 1&3 and 2&4 or at least 1 stick of 256 in bank 1 (minimum).
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