The iMac you're talking about is a revision C iMac I presume, the only 266Mhz model availible. Your iMac has a RagePro card with 6Mbs of VRAM. Should you find only 2Mb in place it was taken from its original place, they were all delivered with 6Mb, only revision A came with 2 Mb.
If of course there's only 2Mb present you either
a) have a revision a iMac
b) need to buy an extra 4Mb if you want some decent quality, you can go to your local hardware dealer and ask for SGRAM, if you want I can look up the reference code in the store tomorrow ...
One of my three current Macs is an Apple iMac revision A. Now it has an ATI Rage IIC Graphics Accelerator chip integrated into the logic board. It came with a standard 2MB of SGRAM. There is a slot for upgrades in which I installed a 4MB SGRAM chip. Now the revision B iMacs are the exact same except they were upgraded to an ATI Rage Pro Turbo and the upgrade was installed at the factory. So none was needed or possible by the customer. Revisions C and are the exact same except processor clock speed, casing colors (fruit flavors instead of the Bondi), and Apple removed the 4Mbps IrDA port. They contained 266MHz or 333MHz PowerPC 750's (G3"s). So your's should not need or even except another SGRAM (VRAM) upgrade.