I'm fairly decent with computers, so I can offer some advice here. (Sorry if this is a bit lengthy)
First off, the 2GB RAM stick is a good call - If you're running a 64 bit version of Windows and have a 64-bit version of Java installed. The problem is that a 32-bit version of Java will not use more than 1GB of RAM, so Minecraft can't have more than double the standard memory in use. (By default Minecraft uses 500MB of RAM)
If you do have a 64-bit version of Windows, and you have the offline mode version of 64-bit Java, then you can make the following file and save it as 'Start Minecraft.bat' to make Minecraft start with more memory than it normally will.
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@echo off
"PATH TO 'javaw.exe' HERE" -Xms2G -jar "PATH TO 'Minecraft.exe' HERE"
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Here's what mine looks like, as an example. Notice the -Xms900M, which means I have assigned 900MB of my RAM to Minecraft (I have 2GB in my laptop, but I have a 32-bit version of Windows and a 32-bit version of Java)
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@echo off
"C:\Program Files\Java\jre6\bin\javaw.exe" -Xms900M -jar "C:\Minecraft\Client\Minecraft.exe"
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Looking at your screenshot, nothing else should need much upgrading, as long as you are not running a memory-hogging program at the same time as Minecraft, such as an Internet Browser or an Email Client.
If you plan to do that a lot, you should look into upgrading your CPU, as the more threads it can handle at once, the smoother it will all run simultaneously without creating lag in Minecraft.
Be careful if you choose to do this though - while most laptops' CPUs are upgradable, not all are, and they are very fragile and susceptible to static electricity, etc..
Everything else looks good to go for Minecraft (if you're playing other games with higher graphics, you will notice some lag/decrease in performance because of your low graphics card rating, but as Minecraft is not a graphic-heavy game, this will not affect the performance of Minecraft. Also, upgrading the graphics card in a laptop is never possible, so you just have to live with what you have(Sorry!)).
Anything else just ask, like I said, I'm fairly decent with this kind of stuff. Just don't ask me about Macs, they are not configurable so I do not use/support them.
Hope this helps/helped!
EDIT: Saw your new post - you have a 32-bit install of Windows, so you must have a 32-bit install of Java, so you cannot dedicate more than 1GB of your RAM to Minecraft. You can just copy & paste the example of my code above and save it as "Start Minecraft.bat" (Assuming that the path to your java and Minecraft.exe file are the same as mine of course.)
