It seems that 'some' people can upgrade to two 2gb sticks for 4gb ram total, but other's cannot. Those that do apparently aren't getting the full 4gb of memory in windows, just 3.25 (as though it were running a 32bit OS). The only way to know, i suppose would be to try. Can't borrow some ram to test eh?
I have the Dell Inspiron E1505, which is supposed to be the same thing, although I've never dug around to find if there are any differences. I currently have 4GB of RAM (2x2GB) installed, and it works great. It is running XP Professional, and as people said has 3.25 GB available.
I just brought it out of a closet last month, dusted it off, added the extra RAM, installed a new 9 cell battery and keyboard (some of my keys were dead) for about $40, and then upgraded the processor for another $30 to T2700 @ 2.33 GHz, and now it is very functional.
Since I shuffled some RAM from another system that cost me nothing. However, the RAM I used says Samsung M4 70T5663RZ3-CF7, PC2-6400-666-12-E3. Looking on Ebay, these exact modules are running about $11 each right now. So, $22 to upgrade to 4GB is not a bad price, even for an experiment.
The computer's a little bulky, but great as a back-up computer, and the screen is sharp. It also has very easy access for a hard drive upgrade, so if you like seeing how long you can extend the life of an old computer, 120 GB SSDs are getting much cheaper, and could be reused later, and people claim to have installed both Windows 7 & and Windows 8 on this machine. This 8-year-old laptop could last another couple years without feeling obsolete with a modern operating system, a SSD, 4GB RAM, and a 2.33 Core Duo processor. I may just go wild and max it out for fun.