Apple seems to have done a very good job expunging its old "Developer Notes" from the Internet, but digging enough confirmed my rusty memory:
The Rage 128 Mobility in the "Pismo" has its 8MB of RAM integrated onto the chip die. There's no external RAM bus on it at all. (It does have the inherent ability of all AGP video chipsets to grab textures straight from system RAM, but it can't use system RAM for the base framebuffer.)
I do remember noting once, and this *could* be a mis-recollection, that at least one of the "Mobility" versions of the Radeon 7000 was actually pin-compatible with the Rage 128 Mobility. If that were true and it would literally be electrically compatible with the rest of the existing circuitry then in theory with BGA rework equipment you could upgrade to a Radeon 7000 with 16MB of RAM. (the weakest version) You'd have to upgrade the machine's firmware, however. Possibly some creative hacking of the firmware used on the 550/667Mhz Powerbook G4s would work, as it's close to the same motherboard chipset.
Everyone harps on "VRAM" as the problem with the pre-Radeon chipsets. Technically the problem is that they only support AGP texture dimensions which are an even power of 2. *That* is why "Quartz Extreme" doesn't work. The Radeon 7000 is "insignificantly" faster than the 128.