@Sourabh
I checked with the dealer, and sorry, it is indeed 2X256 MB DDR2 RAM as u said and not 1X512 MB.
And i also clarified the upgrade option, and the fine print said that its upgradable upto 4 GB
with discard. 
.
There are 2 SODIMM slots as saurabh said.
And yeah, by upgradable upto 4 GB, they mean an upgrade of 2 X2048 MB !!???
And yes, the 4GB upgrade would be more expensive than the laptop itself.
I was going through the dell website, where they let us customise the configuration, and a 2X2048 MB upgrade costs an
ADDITIONAL 60,437 bucks!!!
And speaking of dell, that paritcular laptop which i provided a link for, had me drooling
. Really.. 12.1 inch laptops are cool.....
Pity,.. the laptop of your dreams always costs 25000 more than your budget.... always has... always will.... (sigh)
