yes!
with a 32 bit windows operating system your total memory, including video memory can only total 4 GB. With 4 gigabytes of system memory and 1 GB of video memory, you will lose 1 GB of system memory.
you can see this in your control panel system.
unless of course you are using windows7 32 bit. then, it will see more than 4 GB, however, Ive read that it wont actually use more than 4 total.