My Sawtooth has been running 2GB for around a year now. Works fine under 10.2, 10.3, and 10.4. When OSX was first coming out, someone posted a get-info shot showing 2 GB in their Sawtooth. That was under either 10.0 or the Public Beta.
OS 9 can partially get around the 1.5 GB limit. You can, for example, declare a 256 MB RAM disk for scratch. That would be allocated from the otherwise-unavailable last 512 MB.