daedalus685 :
That is entirely false and not at all what he asked.
GPU memory certainly does take up address space, a 32 bit OS only has 4gig to go around.
And YOU are Misleading the OP too !!
The address space eaten up by VRAM is not 1:1.
The amount of space taken up by a card's VRAM is much less than that on the card itself and the IHVs further limit it to usually around 256MB, and with PCIe it is similar to the aperture size in AGP, but PCIe act a little differently, and floats dynamically depending on resource needs in Direct3D. Also remember not all VRAM space is mapped onto the system some is for local buffers on the card itself.
Now, in Vista (which the OP doesn't have) the situation is even better where WDDM manages this level and also has the ability not to map resources not associated with the CPU and usually keep the limit around 256MB.
To the OP, don't worry about 1GB bs 512 MB for address space, worry about it for value for dollar. Unless you are using high resolutions or high levels of AA or some GPGPU apps, you likely won't see much benefit from a 1GB card so just save your money.
4GB RAM + XP64 + 1GB 4850 to run crysis @ 1280x1024 with 4XAA isn't going to be different from 3.2GB RAM + XP32 + 512MB 4850.