Quite frankly the guy does not know what on Earth RAM is all about
Well actually whoever the guy you refer to is - he is in essence correct.
In hibernation the data held in ram is copied to the HDD. Therefore if, as he says, there is insufficient free space on the hard drive, equal to the amount of data held in ram then in very basic terms
hibernation is bound to fail.
Hibernation is a power-saving state designed primarily for laptops. While sleep puts your work and settings in memory and draws a small amount of power, hibernation puts your open documents and programs on your hard disk, and then turns off your computer.
Of all the power-saving states in Windows, hibernation uses the least amount of power. On a laptop, use hibernation when you know that you won't use your laptop for an extended period and won't have an opportunity to charge the battery during that time.
Upon hibernation, the computer saves the contents of its memory (RAM) to a hard drive Upon resumption, the computer is exactly as it was upon entering hibernation
Sleep is a power-saving state that allows a computer to quickly resume full-power operation (typically within several seconds) when you want to start working again. Putting your computer into the sleep state is like pausing a DVD player—the computer immediately stops what it's doing and is ready to start again when you want to resume working.
When placed in this sleep mode, aside from the ram which is required to restore the machine's state, the computer attempts to cut power to all unneeded parts of the machine. Because of the large power savings, most laptops automatically enter this mode when the computer is running on batteries and the lid is closed.
However whilst hibernation MAY work for you and without any apparent problems - your problem is that you have ONLY 512Mb of ram of which ONLY 448Mb can ever be available. The fact that Microsoft advice that XP Home WILL run with 64Mb of ram but recommended 128Mb is not in essence reality.
Additonally you will find all manner of reports on the web regarding some process that will work with such a setup and then just as many telling you it will not.
Generally they should be ignored unless from a reputable source.
Is this person saying that I cannot use 1GB of my 2GB
NO because you do NOT have 2Gb.
The principle is PHYSICAL memeory.
and as the pagefile by default is 1.5 times the physical memory installed that in your case would be 768MB as my colleague Ztruker
I can alter my pagefile size by customising the data on Computer Management, but at present I prefer let Windows do it automatically, which it does.
If you have NOT made any changes, that evidence alone indicates that you are trying to run a setup that has insufficient PHYSICAL memory.