If your device is not recognizing the microSD card then follow these steps:
1. Go to: (choose based on OS version)
a) Settings >> Media Card  b) Settings >> Advanced Options >> Media Card
2. Check the following settings (if they are not listed this way, then change to reflect the following:
a) Media Card Support: On
b] Mass Storage Mode Support: On
c) Auto Enable Mass Storage: Yes
3. Save the settings and exit
4. Go back into Options >> Advance Options >> Media Card
5. Press the menu key and select format.
Images:

I have come to realize that cheap memory cards no matter how big are bad news you do get what you pay for ....

the update definitely supports 2gb memory cards. but  memory card is for storage purposes only, inserting one won't increase performance of BB and also, games and other programs for  BB can't be installed to  microSD card.