Well, i think 2 gbs is the max one would want to go. I recently upgraded mine from one gig to 2 gig and the performance is no different under normal usage, but i do notice that under multiple huge aplications and video editing, and encoding and everything going at once, i was running out of ram with 1 gb and it would start to slow the whole system a bit. The 2 gb fixes this nicely with pleanty of ram to spare. 4 gbs is overkill. I dont care what applications you are running right now, but if you are running windows xp, you will not really notice the difference from 2 gbs (besides some extra cash in your pocket).
Now, the other topic, can more ram actually slow down your computer. To an extent, yes it can, but will it be significant, no. The biggest problem you may run into is that your ram is currently running pc 3200 in dual chanel, which amounts to 200 mhz per channel (400 mhz total). However, most motherboards, when running 2 pairs of dual channel, can not run 4 sticks at pc 3200 speeds, so they run them at pc 2700 speeds which is 166 mhz per channel.
