If you tend to overclock your comp, I'd recommend you to get DDR3, since they are able to have more clock rate. Whilst the top of DDR2 is 533Mhz by default. As far as I know nearly every RAM is compatible with any comp.
With 4GB, you won't be able to fully utilize you RAM at all. But for future comps you can easily build them in. In my opinion you can buy it, it's definitely enough for gaming purposes.
By the way, what's your graphic card, as it could be the cause of your lag too?