WinXP mode works with 2GB system ram, yes, thanks sammm. I only tested it for about an hour with high textures and ran great, actually the game runs smoother than before, not so choppy on the movement, and I was now able to put my graphics setting to 1680x1050 as well.

Now if we could only force DX10-11 lighting :P

Still I will get another 2GB ram for future needs, and just in case the things go wrong later in the game.