Using 754mb of video ram instead of 1gb

The video ram is mostly used for display on the monitor and you are not going to use all of it unless you have a very high resolution , what resolution are you currently running on your monitor.

native resolution of 1920 by 1080

Im having the same problems as you. My asus 6850 1gb suddenly stopped working and said that drivers failed but was able to recover. Before that games such as Diablo 3 were running at 90 fps at max settings 1080p and now its only running at 60-65 constantly dipping below 20 when attacking monsters. I then check in dxdiag and it was saying i only had about 717 dedicated memory. i also downloaded gpu-z which enables you do see your gpu performance, it has said i was only using 710 memory while running diablo 3. I really hope my graphics card isnt dying so soon. just bought the darn thing.