he's right, Huge amounts of RAM make no difference, if the chip isn't fast enough or powerful enough, you can slap 10GB's or RAM on it & it won't make a dang difference.
also the supposed 256MB of onboard is dependent on how much system RAM you have, that 256MB is the MAX you can use.
the only real advantage to large amounts of RAM, is for Frame Buffer, or to store larger amounts of data to be processed, if the chip isn't all that fast, there's no point to the larger amount of RAM, as the data is bottlenecked sitting there...
look at it this way, assume there's only a dozen cars or so on the highway, & can ONLY drive the speed limit, whats the point of turning the 2 Lanes both ways into a 4 Lane one? only reason to increase the Room (amount of RAM), is if the current roadway is saturated with cars, by increasing the amount of lanes, you can increase the amount of cars in one direction passing a given point an hour...
not the best analogy, but its better than nothing...
The faster the card is, then you can benefit from more RAM, since more can be buffered before processing, with out sitting there for an eternity.
even if more RAM did make sense, as I mentioned its using slower System RAM... dedicated video RAM in general Runs FAR faster than System RAM, also the memory bus is wider (this is where the Highway multi lane analogy can come into play), system Memory runs in general on a 64-bit Bus (128-bit if running Dual Channel, though its still 64-bit, just 2 sticks running simultaneously in 128-bit), where as most regular gaming video cards run on a dedicated 128-bit bus at least, most good cards are 256-bit, & some high end ones even higher yet. coupled with the faster clock speeds of the RAM... can really make the difference (really basic Budget cards & most low profile cards run on a Slow 64-bit bus hindering performance greatly, despite many of them stuffed with large amounts of RAM).
by the way, what card were you using before?