Can I use DDR PC2700 memory in my machine if it shipped with DDR2 PC2-4200?

No, actually. DDR (aka DDR1) is incompatible with DDR2 memory. DDR1's speed range from PC1600 to PC3700 while DDR2 ranges from PC2-3200 to (as of right now) PC2-6400.<br />
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DDR1 memory for a desktop has 184 pins while the DDR2 equivalent has 240 pins. Both DDR1 and DDR2 for a laptop has 200 pins, but the design is different to keep you from installing one type of memory in the other's slot (and possibly damaging the machine).