(Warning, your eyes may glaze if you aren't interested in tech explanations.)
We need to be careful exactly what we're referring to when we say something like "It only handles 2GB."
XP is a 32-bit operating system so it will address up to 4GB of RAM, just like the 32-bit version of Vista. What confuses a lot of people is when you install 4GB the maximum you will see in XP or Vista 32-bit, eg. the maximum that is available for programs to use, is 3GB because Microsoft reserves 1GB of its address space for accessing various hardware devices, like video cards, etc. (Google "memory mapping")
Your computer will have hardware limitations on what you can physically install. It will only have so many memory module slots (typically one, two or four). And the memory controller will only accept certain capacity memory modules in each slot.
Laptops are always crammed for space so manufacturers will almost always make tradeoffs that will affect your ability to expand things like memory. If they think the processor power, video capabilities and hard drive size and performance limits the laptop from certain kinds of memory-hungry uses, like gaming or heavy multimedia editing, they will choose to limit memory to 1GB or 2GB. Their assumption is that the vast majority of users of that model won't care about more RAM anyway, due to the other performance limitations.
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