App store says OS X 10.8 requires at least 2 GB of memory. I have 249GB of memory

I have just copied my entire HD to an external drive and then wiped the original HD as it was running really slowly and want to rebuild with only the necessary programmes etc. First thing I want to do is upgrade from Snow Leopard (OS X 10.6.8) to Mountain Lion. When i try to download from the app store I get this message: OS X 10.8 requires at least 2 GB of memory. Having just wiped my HD I have the full capacity of memory (250GB). Can anyone help?
FYI - I have just managed to do the exact same upgrade from Snow Leopard to Mountain Lion on my Mac Book Air with no problems at all.
iMac details below:
Model Name: iMac
Model Identifier: iMac7,1
Processor Name: Intel Core 2 Duo
Processor Speed: 2 GHz
Number Of Processors: 1
Total Number Of Cores: 2
L2 Cache: 4 MB
Memory: 1 GB
Bus Speed: 800 MHz
Boot ROM Version: IM71.007A.B03
SMC Version (system): 1.20f4

Your confusing hard drive storage space with RAM (Random Access Memory) memory.
The two are completely different.
You only have 1 GB of RAM installed.
Your iMac can take up to a max. of 6 GBs of RAM.
I suggest installing the max. amount.
You can purchase reliable Mac RAM from online RAM vendors Crucial memory or OWC (macsales).
They have a chart or table that will tell you the type and specs of the RAM you need for your iMac.
Good Luck!

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