Adding more RAM at this point is not going to improve things. The errors that you are reporting would be due to OS, HDD, RAM or worse case MLB.
The only way to get to the bottom of this is to reduce the computer down to the basics. In your case that would be an Airport card (if one was fitted under the keyboard) and RAM under the keyboard (not applicable).
That said a faulty Airport card normally results in a kernel panic during the boot process or system freeze when enabled including -3278 type errors.
If you had access to an external HDD that would be useful to see if these issues could be reproduced. Do you get the same outcome(s) when booted from the Mac OS install disc media?
If the issue is not there when the iBook is run from external HDD or CD then it is likely that the HDD is failing in such a way that disc first aid is not able to report an issue. At that point you would be looking to remove the HDD and or replace it (not that easy on your iBook).