Yes, this has been discussed several times before, and it's an unfortunate oversight in the way Apple runs its stores. Basically, when you buy online, you're upgrading from one amount of RAM to another. When you buy in person, it's already got the stock RAM, so you're buying RAM at the full replacement price and ending up with the stock RAM too, thereby adding to your cost. They should really have a policy to deal with this ('Books that they ship to stores without any RAM, for example, so that customers can custom-configure with more), but they don't.
Unless there's a way of talking them down (I wouldn't know), your best bet is to either just order online configed the way you want, or buy the RAM from a 3rd party and install it yourself. If you just go all the way to 2 gigs, it'll cost you about $200, and you're good to go.