HP 740N memory failure?

Hi there, I recently tried to run a diagnostic CD tool (that came with a newer HP I own) on my HP 740n PC, and during the test, it came back saying something about my memory being bad. it said something about how it sent 'AAAAAAAA' to the memory modules, and received 'AAAAAAA8' as the response. I was wondering if there is a way to fix that issue? I'm not sure which memory module is bad, but if I remove the memory from my PC, then I'd only have 512 MB. would that even be enough to run XP? thanks

512 is okay for XP, 1GB is better.

Remove half the memory and test. If okay then the removed memory is defective, replace it.
Otherwise swap memory and test again.

Note that sometimes simply removing and reinserting the memory (carefully) will fix the problem (dirty or corroded contact).