Whic revision MacBook is it? Hold down the option key while clicking the Apple menu, and System Information should be the first option. (IF not, About this Mac has the button there). On the first Hardware tab, it will have a Model Identifier entry, something like Macbook3,1.

2GB total ram is going to be a little slow if you do upgrade to 10.7, or want a VM open. While Apple's page may only list 2GB max for your model, any of the Core 2 Duos should actually have a higher max, but some were strange in that the max was 3GB. I forgot about this earlier, but Apple only reported memory configurations they shipped on that page, compared to the true chipset maximum.

http://www.everymac.com/systems/apple/macbook/index-macbook.html is a better guide to look at for max ram. If it came with 10.5 (instead of 10.4 on the restore discs), odds are it can go to 4GB or 6GB total.