Shader Model 2.0 is such a vague term. Each vendor had their own variation on Shader Model 2.0 and the differences really were not resolved until Shader Model 3.0 was standardized; thus you had SM2a, SM2b and SM2c.
Vertex texture fetches are actually a Shader Model 3.0 feature. And even then, not all hardware that claimed to be SM3 compliant supported them. For instance, anything based on the ATI Radeon x1000 (R500) architecture lacks said functionality.
In fact, the hardware you mentioned is actually based on the R300 architecture. This was the same class of hardware as the Radeon 9700 (first Shader Model 2.0 card on the market). So you definitely will not have vertex texture fetch support on a Mobility Radeon x300.