But what does it say for 'Approx Total Memory' under the 'Display' tab?
Also, see this for more information about this issue:
http://support.microsoft.com/kb/978610
Another thing to try is to, go to run, type "msinfo32.exe", go to System Summary and see what it says about your RAM in there.
But this problem is like what I have on my laptop using on-board graphics, I have 3GB on my laptop, but only 1.72GB available because the on-board graphics required some RAM.
Also, like the article says, "Usable memory is a calculated amount of the total physical memory minus 'hardware reserved' memory."
Hardware reserved memory being your on-boards graphics probably, because the on-board graphics relies on
shared memory, because it doesn't have any memory
dedicated to itself, unlike graphics cards.