It is the max shared memory if you are using the build-in HD4xxx on your CPU. Your discrete GPU will still have 1 or 2 GB. But in my opinion, buy the 2 GB version anyway. 1 GB of VRAM is completely insufficient and will also make it harder to sell second-hand on Ebay, when you're ready to upgrade. Also the price difference should be negligible.
Example: I previously owned an old ATI HD 4670 with 512 MB of RAM, but everyone on Ebay was looking for the 1 GB version. Because of this, I couldn't even sell it. I ended up giving it away to a Tom's Hardware user.