Yeah totally confusing. If 2 GB is the max I say buy a new computer. If 8 GB is the max ... buy a new computer. Also if you are stating that only 1.74 GB of 2 is being used that sounds just about correct, I believe some of the memory is reserved for the OS itself or is not used. Sort of like a flash drive it may say 2 GB but that is not what it really holds.
Or he is saying I have 8Gb of memory installed, but i am running a 32bit OS that can only see 3.25 Gb of ram, by the time windows loads its close to 2.00Gb, and if i am using a on board graphics solution that will take at least 256Mb of system memory.
The solution if the case, go into the bios and enable memory mapping.
Install a 64bit operating system because it can use and see more, 32bit is limited to seeing and using 3.25Gb of memory only.