Hi
I have found this Corsair Value ram VS1GSDS400 in a local shop for 30 bucks.
I was wondering if I can safely remove the old 512mb pc2700 module and install that one without haivng issues (ibook 1.33ghz 12'' mid 2005)
Sure, you are only going up one step in speed, and the memory will simply function at whatever speed the memory bus supports. You shouldn't have any problems with that chip.
Check in your System Profiler to see if the chip is fully recognized.