Only 2GB? It's certainly not an OS restriction. I'm assuming it must be your MoBo then.
Do you have the exact make/model of your computer? Find a link if you can; I'd like to know more about the motherboard.
If it weren't for that, I was going to recommend this:
http://www.newegg.com/Product/Product.aspx?Item=N82E16820231145
I already have one kit that I purchased about 6 months ago and was planning on picking up a second since I started using X64 Vista. $45, DD2 8000/1000mhz. Great modules, rock solid stable (I overclock). Very well received by the people who have bought them.
As for VGA cards, check the following deals on HD4850s. They are all at/under $150 (some with rebates, some without, some well under $150 w/ rebate).
Sapphire (well reviewed, good manufacturer, good benchmarks, great price)
http://www.newegg.com/Product/Product.aspx?Item=N82E16814102770
HIS (well reviewed, good price, current special deal w/ memory purchase)
http://www.newegg.com/Product/Product.aspx?Item=N82E16814161235
Gigabyte (good brand)
http://www.newegg.com/Product/Product.aspx?Item=N82E16814125238
MSI (good brand)
http://www.newegg.com/Product/Product.aspx?Item=N82E16814125238
Powercolor (great price, few reviews, looking good so far)
http://www.newegg.com/Product/Product.aspx?Item=N82E16814131125
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