fiollhoip, Do not try to upgrade the firmware you will kill your player and it will not change the memory problem.
The bad news is your player has or had a hacked memory chip. I would guess that it is really only a 128MB chip. When you formatted your player you removed the memory hack that was making the 128MB chip read as 4GB. To confirm the true size of your memory you need to open the player and check the serial number of the memory chip ( the largest chip on the board) with this list of Samsung and Hynix chips.
http://www.mympxplayer.org/samsung-a...rs-vt1692.html
If you have recently purchased the player I suggest you contact the seller for a full refund.
If you look throught the forums you will see many posts by peole who have bought hacked players.