1 gigahertz (GHz) or faster 32-bit (x86) or 64-bit (x64) processor
1 gigabyte (GB) RAM (32-bit) or 2 GB RAM (64-bit)
16 GB available hard disk space (32-bit) or 20 GB (64-bit)
DirectX 9 graphics device with WDDM 1.0 or higher driver
My question is. Since windows 7 requires all this does that mean when I'm playing skyrim 1ghz of my processor is being used for windows 7 as well as 2g of ram leaving only 2 for skyrim? Or how does that work?
System reqirements are not fully real world hardware usage requirements. Windows does not just grab 2GB of your memory for itself, it has to work with what you've got. System requirements are just used as a framework for people to reference to determine whether or not Windows will run at it's best potential, as naturally if you have less then 2GB of memory which practically a non issue for most modern systems, Windows will have to work with attempting to allocate all it's resources and other program rescources into the small pool of memory, in that case virtual memory will play a large part (where you HDD acts as RAM) and you'll see performance degradation.
Don't assume that Windows will always needs 2GB for itself, granted, the more memory the better, as data then has a larger space to roam and you won't be needing virtual memory.