Ah.. here it is:

http://support.microsoft.com/default.aspx?scid=KB;en-us;q253912

So your super-duper 256MB video card is the trigger. But you should be able to utilize more RAM (up to 1.5GB) by adjusting the vcache size as noted.

Cheers

EDIT: this link has an explanation of the problem (and solution):

http://aumha.org/win4/a/memmgmt.php