The particular RAM you bought is the correct memory. However, the flashing light is probably indicating that you received a bad module. I don't believe that mixing a 1GB module and a 512MB module should result in the black screen/flashing light.
Then again, I'm sure you've noticed that plenty of users have had trouble pushing new modules into a fully seated position. Perhaps on the second or third try you'll have better luck applying enough leverage. If the result is always the same, however, it's probably a bad module.
On the other hand, the RAM in a MacBook is recommended by Apple to be two equal modules, referred to as "matching RAM:"
"Note: For best performance, fill both memory slots, installing an equal memory module in each slot."
MacBook: How to install memory
MacBook (13 inch) Memory Replacement Instructions (Do it yourself Manual)
Troubleshooting a MacBook or MacBook Pro that won't turn on If you recently installed additional memory