There could be several reasons why there is such a large price difference.
For instance, memory runs at a certain "rated" speed.
For example: 512MB PC3200 means that the memory has 512MB, and runs @ PC3200 (DDR400 (200MHz)) DDR = Double Data Rate (so think of it as twice the speed), PC3200 actually runs @ 200MHz but because of the technology, it doubles that speed to "DDR400" 400MHz.
Now, with memory there are different "speeds", such as Tras, Cas e.t.c these are the individual times that the memory is designed to communicate with different parts of the computer - obviously the faster the timings are on the memory, the faster the memory can run which means faster applications.
For example over here in the UK, the cheapest you can buy 512MB PC3200 DDR1 is about £30.00 however the timings are horribly slow: 4-8-8-10
each - indicates the speed as per one of the timings "names" such as: "Tras" (the time it takes transferring one bit of data to the CPU).
Basically i could Also buy 512MB PC3200 DDR1 that runs @ 2-2-2-5 (fastest on the market) which would cost me about £110 (over 3 x the amount).
So, you will find the cheap memory is very slow, and the fast memory is usually very expensive - due to the high-end technology being used.
And then you have the other possibility: that your Vendor is charging ALOT more than it should be compared to online retailers.
You will always find that online retailers / shops are Alot cheaper than in a local vendor / store / shop, this is because these online companies work out of one huge supply center / dock, allowing them to cut all the costs of marketing / shipment to shops, employing new staff e.t.c.
What i would do, is ask your "local vendor" for the "specifications" of the memory (ask that they tell you the Cas / Tras e.t.c), if they don't know what your on about - don't buy from them.
Also, your other problem is, that your going to have to use some Compaq (memory) compatible memory (pretty much just Compaq/HP memory) which they might be giving you a price for, as Compaq/HP memory is incredibly expensive.
Post back with how much you want to spend in US Dollars / UK Sterling with a site that will deliver to you and we can help you find what your looking for alot quicker.