My guess: your 4GB card is SDHC, not SD. The S2IS (AFAIK) doesn't support SDHC cards due to its age.
You're likely stuck with cards of 2GB or less, unless you can find some 4GB cards that are not SDHC (4GB SD cards are very rare and very likely no longer produced).
BTW, are you sure about the error message? You should IMHO get "Memory card error" for incompatible cards.