Ok. Radeon X700= 256MB + 750MB (4GB-3.25GB) = 1GB video for your Win 7. WIn 7 recognize the 4GB, but add 750MB to the 256MB of your GPU to get a 1GB for video.
Umm...what? He has 256MB graphics card. The other memory address ranges are reserved to the rest of the system devices; storage controllers, PCI bus and PCI Express controllers, audio, LAN, chipset DMI or interconnect, etc.