You can actually put up to 512 MB of ram in the Rev. B model, which is the preferred model anyway because it has 6 MB of VRAM instead of just 2 MB.
You can put 512MB in a Rev A as well, they have the same Grackle memory controller. (For that matter if you want 6MB of VRAM in a Rev. A you can fix that, too, it's on an SGRAM DIMM. The only set-in-stone difference is the Rev. B has an ATI Rage Pro instead of a Rage IIc; this same difference exists between older and newer revs of the Beige G3.) The reason a lot of people think that 256MB is the limit on either one of these is because the vast majority of 256MB SO-DIMMs you'll find lying around were pulled from laptops newer than the iMac G3 and have 256MB in a single bank, which the Grackle can't take. (You'll also see "384Mb" quoted as a limit on these machines because for a while the only 256Mb dual-bank SO-DIMMs that were available were twice as tall as the standard low-profile ones, and a tall one will only physically fit in the slot on the upper side of the CPU card. Googling around I guess there's a bunch of people that cite Low End Mac as a source for a claim that Rev. As only support 128MB in one of the slots, but if we know anything now it's take *anything* that ever appeared on Low End Mac with an iceberg-sized grain of salt.)
The most reliable source for DIMMs that actually work are from early high-end Pentium III laptops that were new enough to be worth maxing out but old enough to still have 440BX-era motherboard chipsets. (Laptop chipsets based on the 815 and later support the denser DIMMs, and, like I said, those machines vastly outnumbered the older ones even in the early 2000s.) I had 512Mb in mine, and I would still call it not enough to be useful, although I guess I'll be fair, OS X was a wallowing pig on these machines for all the reasons. The difference between 256 vs 512mb of memory was hardly the straw that broke the camels' back.
The only obvious reason I can think of for it to be "picky" about hard disks, as long as they're real spinning media is that the onboard controller only supports ATA-3. And 80 GB or less is a safer bet than 128 GB+.
Have you actually ever owned one of these machines? All of these older Macs (I'm going to call anything predating the AGP G4 towers "old") are weird and picky about a *lot* of things. Both the iMac G3s and my B&W G3 tower would be just plain
weird about certain hard disk brands or models. Off the top of my head I recall the iMac was perfectly fine with Quantum drives (I think that's what the OEM one was), but it absolutely refused to behave with either Fujitsu or IBM Deskstar disks, and with either Maxtor or Western Digital you could flip a coin whether it'd work or not. (All of these were drives under 128GB and worked fine in other machines.) The B&W was "less" pickey but still hated Deskstars universally, and I also ran into an odd situation where it worked fine with a Western Digital 80GB to install OS9, but if you tried to install OS X on that particular drive it'd go through the motions but then greet you with a big full-screen (/) NOPE symbol trying to boot. Swapped it for a same-size Seagate, no problem.
I mean, FWIW, maybe other people had much better luck. Even within brands it would mostly be hit and miss, it could well be that I just kept drawing the jokers out of the deck. But I
have heard similar complaints from other people about these older Macs.
don't recall the source of the issue (OpenFirmware, Mac OS, other hardware), but you generally want the operating system installation to stay inside the first 8 GB of the drive on these systems
The tray-loading iMac G3s (and I guess it sounds like the first-gen iBooks?) were the last machines to have this issue. And it's another reason why they suck for OS X, given the OS basically consumes that much. I actually hacked up the Netinfo database on the OS X install I had on the iMac so it'd put the user directory directly on the next partition, and likewise relocated the Applications directory, but it was a huge hassle that a normal mortal isn't going to do.
(I *really* went to town with breaking NetInfo on Public Beta; I had the machine sitting in my cube at the office, and one boring afternoon I actually succeeded in making it possible for people to log into it using their NIS accounts. It's really fun how much of the old NeXTStep OS was still hiding under the covers in early releases of OS X. I also experimented with running OS X on the NextStep UFS filesystem, it was an option, which turned out to be a BAD IDEA. The OS itself would work for the most part with a true case-sensitive filesystem, but applications broke *all the time*, including a depressing amount of the early open-source ports. Fun times.)