First off, Command + Option (or Alt) + P + R doesn't "reset the firmware". It's actually the modern Intel Mac equivalent of the old "Zap The PRAM" (Zapping the NVRAM in this case) troubleshooting step, that was often recommended and used during the old PowerPC Mac days. More info on it from Apple is here: https://support.apple.com/en-ca/HT204063
First, what I would try doing is to try booting your Mac from an alternate startup disk, such as your Mac OS X install disk/MacBook software disk, or an external hard drive, to verify that the issue isn't limited to your main startup volume.
Second - immediately, your symptoms as described suggest either potentially bad RAM, or a bad RAM slot. First, try reseating your RAM before powering up. Failing that, try testing each of the two individual slots of RAM with a piece of known good RAM.
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=== Update (01/16/17) ===
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Have you tried swapping out the hard drive between this Mac and your other MacBook (which I assume is another A1181 with OS X installed)? Did you try booting your Mac from an OS X install CD/DVD? From what you've said so far, you've only tried booting your MacBook from its original hard drive and OS.
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Before doing anything rash, or drastic, it's helpful to at least try to isolate other variables (e.g. the OS on your boot disk) before going further.
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At least what you can try is to just remove the hard drive. If, on boot, the display lights up and shows the blinking "?" folder icon, at least that tells you that the Mac's hardware is booting up the way it should.
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Another alternative would be to try booting from a [http://refit.sourceforge.net/doc/c1s5_burning.html|rEFIt Boot CD]. If successful, you could try to install rEFIt (an older boot manager for OS X/Linux//Windows) to your main hard disk to get your system back.
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At this point the only other thing I can think of would be to try using the [http://www.dannydullin.com/apple-service-diagnostic-asd-reference-list/|ASD disk] to at least diagnose the problem on your Mac. The thing is, there are two types of MacBook 2,1 (the Mid-2007 and the Late-2007), so depending on your Mac's date of origin it'll need either [http://dreamsupport.us/downloads/apple-mac/Apple_Service_Diagnostic_Disks_25_GB/|ASD 3S116 or ASD 3S123]. (The former can be burned to a CD, while the latter must be installed to an external hard drive.)
First off, Command + Option (or Alt) + P + R doesn't "reset the firmware". It's actually the modern Intel Mac equivalent of the old "Zap The PRAM" (Zapping the NVRAM in this case) troubleshooting step, that was often recommended and used during the old PowerPC Mac days. More info on it from Apple is here: https://support.apple.com/en-ca/HT204063
First, what I would try doing is to try booting your Mac from an alternate startup disk, such as your Mac OS X install disk/MacBook software disk, or an external hard drive, to verify that the issue isn't limited to your main startup volume.
Second - immediately, your symptoms as described suggest either potentially bad RAM, or a bad RAM slot. First, try reseating your RAM before powering up. Failing that, try testing each of the two individual slots of RAM with a piece of known good RAM.