ihog :
That's normal. Windows needs to use a set amount of RAM for system processes.
I agree with the above post. Some of the space is used by hardware and is not available to the operating system and applications. The amount you can use varies, depending on what hardware you have installed.
What happens is that some of the addressable memory (regardless of how much you have physically installed) is reserved for use by page files or by some of the devices that you are using, such as a graphics card, PCI card, integrated network connections, etc., so it's unavailable for use as normal main memory. Hope that helps