There is a hardware limitation in that the motherboard itself only accepts up to 2GB sticks and, since you only have access to one RAM slot, you can upgrade to only 2GB. It doesn't matter if there are larger single sticks of RAM out there, they won't work with your netbook. You will be limited to 2GB of RAM.
Some of the newer netbooks with Intel Atom N570 processors can accept up to 3GB of RAM. Older netbooks with Atom 330, N270, and N280 processors with Nvidia ION graphics can work with 3-4GB of RAM but their chipsets were made by Nvidia and were designed that way. Most AMD Neo, Neo II, and now Fusion netbooks can pack at least 4GB of RAM. The new HP dm1z can work with 8GB of RAM.
Either way, you will be limited to 2GB of RAM no matter what you do. It is a physical design limitation with the chipset and motherboard. I believe Windows 7 Starter is also limited to 2GB of RAM but you would still not be able to go past that mark even if you upgraded to Home Premium, Professional, or Ultimate.
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