Corrio, I am sort of having the same problem. My player, though not the same as yours, was originally 512 MB but after some bad upgrades and formats, it got down to 486 MB. Seems like formatting the player kills some of the memory.
Did your computer recognize it as 2GB before you tried to upgrade it? I think although formatting may cause some memory loss, it shouldn't kill 1GB of memory.
On second thoughts, maybe formatting doesn't kill memory but it's the loaded firmware on the player that takes up the memory...because I upgraded my dead player with another firmware (which by the way didn't recover it) and the memory got back to 493 MB.
Are you sure your player had 2GB ("Giga Bytes") and not 2Gb ("Giga bits")? If it was 2 Giga bits, than it means that your player has 8 times less memory that you thought it had. (1 Byte = 8 bits)
As far as I know, s1 mp3/mp4 players don't come with 2 Giga Bytes...maybe just up to 1 Giga Byte.
...But sadly I found this out when I had already placed an order for a 2GB mp4 player on ebay after I couldn't recover my old player. It turns out that it has 2Gb, not 2GB...so I got conned pretty bad.
2Gb = 256MB
I've had so much loss on mp3/mp4 players...eventually at some point you're gonna have trouble with firmware or memory or you're gonna realize that you've been conned.
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