Palace Member is generally reserved for either people who have been working with us for many years or those people who have demonstrated a long term use of the forum and contribute alot. It is something that Bob and/or I decide on ourselves.
That said, there is a glitch in the software that no one can seem to debug, that some registered users still can't see all of the forum sections. The only cure seems to be if I make them Palace Members. So a user has a problem seeing the "General" section of the forum, they can ask me to fix that, which I do by making them a "palace member". So, either, the person with only 2 posts is someone we have known for a long time, or they wrote me as they couldn't see that section.