Would maxing out my ram to 512mb (from 320 at present) alleviate choppy, fragmented videos (ie- flash & youtube)? Or is it simply because my CPU is so old (Celeron 600, 7 yrs old)?

playing any compressed video requires cpu,vid card and ram all working together in most cases

unless you are running low on available ram(physical) then adding more doesn't help

another issue is your internet feed(buffering)

optimizing your older computer is the most effective remedy, until you can afford a new one