Adding to what Bungiefan has stated, the only and sole *real* limiting problem with the PS2 currently are the ammount of RAM it has for workspace (32 megabytes) which is the only real "limitation" atm.

What does that mean ? It means that given an certain amount of existing gear combination variations there's a limit on how many textures they can load at a given time, meaning they can't do much even if it means reusing existing gear wireframes to do re-texturing. It's really the worst problem with FFXI and the PS2 at the moment. The hard drive partition could be expanded up to the maximum free space the drive has.

The ceiling limit is 137 gigabytes on their (SONY's) HDD driver. But to expand the FFXI partition they would need to negotiate with SCEI due to the partition size being part of the DNAS protection thing. Any changes to the HDD partition sizes would need SCEI/SCEA approval. But it's indeed possible.