Hi
Yes the 7204VXR NPE-G2 supports either a 1 x 1GB or 1 x 2GB in location S1 on the engine board
Look at table 4 (Very bottom)
http://www.cisco.com/c/en/us/products/collateral/routers/7200-series-routers/product_data_sheet0900aecd8047177b.html
Also see:=
http://www.cisco.com/c/en/us/td/docs/routers/7200/install_and_upgrade/npe-nse_memory_install/memory/8358ov2.html
Went through several memory chips from our supplier last year trying to upgrade old NPE-G1s.
I suspect you either have a faulty memory chip or the wrong part from your supplier.
Regards
Alex
Regards,
Alex.
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