256 MB is too little, but it is just about possible to use it
that I just answered.
Boot shows the Dell splash screen then a blinking cursor.
I don't really understand that - you mean that's what happens if you try to boot with the live CD?
Then there's something wrong with that computer - the CD player or what not.
Check options in BIOS to see if something is odd, and perhaps set the memory at a slower rate (not frequency, but RAS, CAS etc)