"DDR2 667/800 MHz SDRAM, 1 x SODIMM socket for expansion up to 4GB SDRAM
*Due to the 32-bit operation system's limitation, only 3GB will show up with a 4GB memory. The 64-bit operating system will not have this issue. For more information, please check Microsoft's support site: http://support.microsoft.com/kb/946003"
You cannot harm a computer by putting in more RAM than specified. Some just use the max RMA the mobo can allocate and ignore the rest. Some simply won't boot, and if you remove it it will work again.
In your case, you won't be able to fit more than 4GB in that laptop because there is only 1 slot and the largest 1 stick of DDR2 sodimm is 4GB. In order for you to upgrade to 4GB RAM, you must swap the 2GB stick with the 4GB stick.
I don't know if it would be 100% worth it to upgrade to 64 bit as the 32bit will still see about 3 to 3.5 GB of that 4GB stick,, would only do it if you feel you need more oomph, but you would have to pay for another windows license to do the upgrade...
1. See if you currently have the 64 bit version of the recovery disk and reinstall window
2. If you don't, you can get the 64 bit recovery disk from you laptop manufacturer (there could be a fee, ask them for details)
3. Your keys works for 32 bit and 64 bit window 7 given you don't swap the version (starter, home basic, home premium, professional, enterprise and ultimate). You have to figure out the rest.
But if reinstallation is too much, then just use 32 bit. You still get more RAM than you currently have, although the investment diminishes and you have to start asking yourself whether you really need that upgrade or you just want an upgrade.