2 by 4 houses have been around for a very long time, and so broadpread is the name “2 by 4” that there are very few people who have not at least heard about it before and know what it is. by 4 itself is simply the name of the dimensional lumber, though it's often associated with the construction method of the same name.
The 2 by 4 construction method is the system of house-framing in which they use – as you probably guessed – 2 by 4s, as well as other “2-by” lumber such as 2 by 6, and 2 by 8. The difference between the 2 by 4 method and other more conventional methods is that the former primarily uses shear walls or structural diaphragms to resist lateral loads while the latter often uses only diagonal bracing, or a mixture of both.
For those who are not familiar with how 2 by 4 houses are made, I'll explain some of the basics and the primary differences between them and and more conventional houses:
2 by 4 – Shear wall panels are (usually, but not always) pre-assembled offsite, labeled according to an accompanying diagram, and then transported to the building site where they are placed in their respective positions. These wall panels are often made in sizes such that one person can pick it up and move it around. Wall panels are either constructed with or without their diaphragm prior to placing into actual position depending on transport and handling restraints.
Conventional – Wall studs are inserted between main posts or columns, and plywood (or equivalent) is nailed or otherwise fastened to them after the fact.
2 by 4 – The nail pitch of the structural plywood that is nailed to the 2 by 4 studs is typically 75 millimeters around the perimeter and 150 millimeters down the center stud. This is assuming the standard wall panel width of 910 millimeters (center to center of outer studs) with 2 by 4s going around the perimeter and a single stud going down the center at 455 millimeters.
Conventional – While there are often sections of the house that incorporated shear walls to resist lateral loads, because these walls are not the alpha and omega in terms of the structural integrity of the house, the nail pitch is typically about 100 millimeters around the perimeter and about 150 or 200 millimeters down the center stud.
2 by 4 – Wall panels are constructed with structural plywood on the outer face, with sheetrock ever finding its way to the inner, interior face. Because 2 by 4 houses relly so heavily on their shear walls for structural integrity, even the fastening of the sheetrock boards on the interior face of the wall studs is factored into the required shear strength of the final structure. Consequently, sheetrock board screws also have a screw pitch of 75 millimeters, and are required to be staggered from screws of adjacent sheetrock boards to maximize the structural integrity and holding power of the wall stud.
Conventional – Sheetrock screw pitch is about 200 millimeters – only what's necessary to keep the board fastened stiffly to the wall studs as it has no structural requirements.
All in all, 2 by 4 houses have proven themselves to be structurally sound and pretty much the only kind of all-wooden structure that can be built higher than 2 floors – although this extremely depends on the shape and surface area of the first floor. The question of whether to use or not to use the 2 by 4 method depends on several factors.
– You'll need sufficient, sheltered area to pre-assemble the wall panels and store them until you're ready to transport them to the building site. Transport vehicles should have an on-board crane with which to unload the wall panels directly onto the surface of the first floor.
– You'll also need a crane or wrecker capable of placing wall panels onto the second floor (truck's on-board crane most likely will not be sufficient) – unless you have adequate man-power to do so without heavy machinery.