you dont need 1gb of vram to max it
i think rockstar set it to medium for 512mb cards because they thought it would cause view distance problems with the settings been fully unlocked on 512 cards but its fine here.
i maxed it on 512mb with this tweak plays great.
read..
http://www.computerforum.com/141431-gta-iv-unlock-those-graphics.html
i think you may be cutting it a bit short with only 2gb of system memory though,thats if your running Vista.