Q: how can i increase the memory in my imac

Just buy more RAM.

Both OWC and Crucial will guide you as to what you need and both offer a lifetime warranty.

Welcome to the Apple Support Communities

First, see if your computer is supported > http://www.apple.com/osx/specs

If it's compatible, open System Profiler app, and copy "Model Identifier" here, so we can know how much memory you can install to the iMac. You can buy the memory in OWC or Crucial (Crucial is cheaper and offers the same compatibility warranty as OWC).

If you need help installing memory, see this website > http://support.apple.com/kb/HT1423?viewlocale=en_US

As mende1 said, check to see if your computer is supported first. Second, Mt Lion really needs 4GB to run well and depending on what software you use, more than that. I found that Word, Safari, and Mail overwhelmed my 2007 iMac with 4GB but maxing it out (to 6GB) made a significant improvement.