I'm sorry I don't have all the data, because it's a problem a friend is having. He says he added another 512MB stick to his old computer and instead of showing ~1024MB, it shows 700-800MB. The difference seems too much to be a bit of space being taken by say, an integrated video card or something.
SO: Windows XP. PC: unknown, very old.
What can it be?
Booting into BIOS should show the true memory amount. Windows sometimes only (Don't recall which major versions do and don't) reports memory not reserved by BIOS. BIOS often dynamically assigns ram to an integrated video adapter based on the amount of RAM installed.
Have your friend enter BIOS and check there. The first page that comes up should show the amount of memory installed. There may also be an option to set the amount of RAM assigned to the video adapter.
This sounds like the PCI hole to me. Certain regions of the physical address space are reserved for the purpose of communication with video cards and other PCI devices, rendering the memory in these regions inaccessible. This does not mean that this memory is actually being used by these devices, it means that this memory is in a part of the address space that is mapped to the memory in these devices and not to the system's physical memory.
As an example, when the high-performance GPU is activated on my laptop, 256 MB of memory becomes unavailable, leaving 7.75 GB of memory. If I only use the low-power GPU, all 8 GB of memory are available.
It appears that the computer cannot support more than 1 GB of physical memory because if 1 GB of memory is enough to reach the PCI hole, than 1 GB is probably the top of the physical address space supported by the motherboard.
