I probably should have made that clearer. Allocated memory space still requires available memory. So even with a 64-bit OS, though your memory address space increases to something like 128GB, you only have 4GB or RAM installed and allocated memory will still take up some of that.
The solution you're looking for is:
a) Don't worry about it. Unless you're working with files/applications that can seriously use more than your installed 4GB, you really don't need more than 4GB.
b) Install a 64-bit OS (check your 8.1 upgrade as it may have included the 64-bit version) and then purchase either a second 4GB RAM module compatible with your current installed, or if you're running 2x2GB RAM modules, purchase 2x4GB RAM modules compatible with your system. This of course assumes your laptop is capable of running more than 4GB of RAM.
-Wolf sends