Your camera is definitely compatible with SD cards up to a maximum capacity of 512MB. It was never hardware tested by the manufacturer with larger capacities and definitely cannot accept any SDHC cards (4GB and upwards); I have also tried one in the past with a 2GB SD card and it was unusable. Unfortunately Samsung have never actually published any hard and fast >maximum capacity is for the Digimax 420.
In summary then, you're good to go with 512MB SD, 1GB SD is a gamble and will either work or it won't (but won't harm your camera or the card), 2GB and above are not suitable.
Answers & Comments
Your camera is definitely compatible with SD cards up to a maximum capacity of 512MB. It was never hardware tested by the manufacturer with larger capacities and definitely cannot accept any SDHC cards (4GB and upwards); I have also tried one in the past with a 2GB SD card and it was unusable. Unfortunately Samsung have never actually published any hard and fast >maximum capacity is for the Digimax 420.
In summary then, you're good to go with 512MB SD, 1GB SD is a gamble and will either work or it won't (but won't harm your camera or the card), 2GB and above are not suitable.