Well DigitalOcean is paving the path for cheap VPSs with higher quality. Kind of going head-to-head with the big boys, in the likes of EC2 and RackSpace. Your current VPS provider is probably using OpenVZ as their virtualization technology, so they can offer lower RAM, because the kernel being used is the same as on the host.
OpenVZ is also known to be very easy to oversell.
DigitalOcean uses KVM instead (much harder, near impossible to oversell actually), and each VPS has its own kernel, so the initial RAM usage will be higher than on OpenVZ. However, 512MB of RAM should be plenty for whatever you are doing.