If the computer has a single memory module check if there is a part number on it. You should make sure it is acually a 128Mb module. If it is 256mb but the board reports it as 128, it means your module is bad. You should change it as soon as possible. Bad memory will always leed to hard to track problems! The same think is true if you have 2x128mb. It means one of the module (or the socket in which the module is) is bad.
As for swap space, you need to create a swap partion on your hard disk. Similar to the partitions you created to install Linux. If you dont have any space left on the disk you will need to resize (if this is still a new install, reformatting and starting over might be simpler for you).
To create the partion, you will use fdisk (like "fdisk /dev/hda" if you want to have swap on the 1rst disk).
To format the partion you will use mkswap (like "mkswap /dev/hda2", /dev/hda2 being the partion you created with fdisk)
Then you will need to add a line in your /etc/fstab to tell the OS that you have a swap partition. It will look similar to this:
/dev/hda2 none swap sw 0 0
Where /dev/hda2 will have to actually be the disk partion you created.
You should try to google for swap partition. There are a lot of good step by step how-to out there to enable a swap partition.