i own two kingston 4gb msd cards, both are ok for most of my needs. they were hard to track down but meritline had them for a bit. to answer your question the r4 is indeed a hardware limitation. there is no way to *upgrade* it. you can't just solder on a schc controller and hope it works with the controller chip of the pcb. you could get an r4 clone but then you start to risk other problems (n5 blows a fuse on msd power cycle boot up). also i still don't know why everyone keeps saying the 'cyclods' is the best alternative to the r4. i guess somewhere along the way the cyclo became the next mainstream kit to get. i would personally recommend the ak2 2.1 (new version with box and black pcb). they got the cost down so low you can you pick up the kit for around $12-15. i've been beta testing new versions of akaio firmware, and to be honest i would not use another flash kit or another firmware at this point. i'm speaking from experience of owning 7 flash kits going back to gba days.

if you do decided to keep the msd and upgrade your flash kit, make sure its a class6 sdhc. there are issues with the slower version sdhc kits and flash kits. if it isn't a class6 rated card, i would return it. also you can find many sites selling the kingston 2gb msd with a reader for under 8 bucks now. i duno about you but on the go 2gb is more than enough for a movie, some emulation, some apps, some games, and some entertainment. when i'm traveling i have a case so having a few msd cards on me isn't an issue.

@Curley5959: sdhc is 4gb - 32gb (where 32 hasn't been produced yet). normal msd are 1, 2 and 4gb only. 4 being rare and harder to find.

cheers,
-another world