Windows only recognizes 'x' amount of RAM - why?
Your system may have intergrated video. This means that some of the system memory is shared with the onboard video. This can be set in the BIOS to be shared from 8MB up to 128MB. If you have 128MB of system RAM we recommend that you do not set the shared memory above 16MB.
Warning, do NOT disable the shared video memory in the BIOS unless you have added a video card to the machine. Doing so will result in no video signal.
Alternatively, the limitation may be related to the Operating System. Windows is limited to a certain amount of RAM dependant on the Operating System and the Service Packs applied to it. The following article will help to better explain these limitations of the Operating System.