Reading Datasheets?

With 4.5v on the gate, it is rated for that 4-4.9A continuous current. Rds(on) typically 0.065ohm @ Vgs=4.5, sat 4.0A, ohm's law gives us 0.26 volts dropped over the fet. 4A*0.26V=1 W

His first statement was in reference to figure 3 (note - this is in the second set of graphs, not the ones on the second page w/no figure numbers), which shows a graph of current vs gate voltage - that at first looks to be saying that at 2v you can get 2A of drain current. But the graph says that that's at Vds=5V, that is with a 5v drop across the fet - that is to say, this isn't a graph depicting useful operating conditions. As you can see, the lines fly off the top of that graph when Vgs enters typical operating conditions :-)