It's not an exact minus of video ram though, not on all mobos anyway. It's video + some other address space reserved for other devices. I had 640 meg Video ram but I only got 2.9 gig out of my 4 on Vista 32 on an Asus board. On most enthusiast machines I usually see about 3 of the 4 gig available, + or - a bit.
If he puts an 8800 gt in there with 512 video ram I'm thinking he he will probably get about 3 gig usable, which is still a lot better than 2 gig