Late to the party I know but yes, it is physically possible to install a 1gb memory IC IF and this is a big if, you can find a 1gb IC with identical timings across the board ( not likely but possible ).
Secondly, once you've used your $1,000 - $3,000 Infrared rework station to carefully remove the 512mb IC, then clean the old solder away, reball the new 1gb IC then reflow it onto the board ( piece of cake with said rework station actually ). This is where the fun part comes in. While the phone will then boot and work properly it will have no clue it has 1gb available ram and not 512mb so you get to either program the phone yourself or have someone else do it ( either a huuuuuuge favor from a friend or n endeavor that could buy you a couple dozen Droid 4's ).
Once you have done the above though, you'll have been better off paying a few more bucks for a Droid 4 which is an improvement over the D3 in every way and already has 1gb ram so enjoy your project.
Tbh, if I still worked for the company I did till 2008, we had a nice IR rework station and many suppliers for IC's and various other chips. I would have gladly tinkered with things like this but in 08' I was still using Windows based phones and it wasn't till 2009 I got my first android device.
I did however increase the vram on a few desktop video cards for shits n giggles and the results after all the work and modifying the bios was varied from OMFGWTFXORWOW! to meh. At the end of the day it will always come down to what you do with the device and what app's you run.
Like the above people mentioned, it's better to run a stripped down rom than it is to try and undertake a task like this unless you or someone you know has access to an IR rework station and has suppliers for IC's that you will need. It would actually be easier to replace the NAND module with a 32 - 64gb IC than it would be to replace a memory IC as the NAND module would require a lot less work on the software end to get working than a memory IC.