I'm correct in understanding that 2x1024 in dual channel would be faster than 4x512 in dual channel?
Yes, assuming your MB can even run 4 sticks (don't be fooled by those 4 slots), it will probably run 4 sticks at slower timings, and many boards are just unstable with 4 sticks. The newer x64 AMD processors with the memory controller on board are more stable and often will run 4 sticks pretty well, but the speed hit with the slower timings can run as much as 10%. Depends on the board. Some boards will even default to 333MHz with 4 sticks.
2 sticks is 4 rows of memory chips, 4 sticks is 8 rows. The more rows you have, the slower it will read and write to them. There are such things as single-sided DIMMS, but they are very rare. Most are now double-sided. (row of chips on both sides.)
I use 2 sticks of 1024, and even when burning DVD's or crunching huge video files, there's always loads of free RAM, never less than 800MB and usually more like 1100.
Given current pricing however, 2x 1024 can be the same price as 2x 512.