According to Mactracker (which is awesome, by the way), the MacBook 2,1 supports up to 2GB of RAM according to Apple, with actual support up to 3GB. Apple always understates the RAM capacity.
It's worth noting that there were two different MacBook 2,1's. The elder was released November '06 and ran until May '07, and the other ran from May '07 to November '07, when the MacBook 3,1 was released.
If you really want to know which one you have, get an Apple Hardware Test DVD and run that. "AHT 3A114" is the old 2,1, and "AHT 3A128" is the new one. Not that it's relevant -- both are still supported by Apple.