|"Why is the Video card subtracting from Motherboard Ram when it has 1 GB of on board RAM."|
As I wrote in my previous reply:
"video memory counts as a part of the 4GB limit that 32-bit operating systems impose"
A 32-bit OS can only address 4GB of memory, and that not only includes system RAM, but also any memory found on video cards, high-end RAID controllers, etc. So if you have a 1GB graphics card, you'll only be able to use 2.75-3.00GB of your system RAM.
"How do I free up more ram for the OS?"
Upgrade to Windows 7 64-bit. Not only is it a much better OS in general, but it'll let you use all of your RAM as well as the DirectX 10-11 features of your new video card.
"The machine is just way to slow."
Probably caused by something other than RAM. 2.75GB is more than enough for WinXP. Do you have a bunch of extra software running in the background?
Socket 939 | Dual-core Opteron 185 @ 3.2GHz | 4GB | 1.0TB | Win7 x64
GeForce GTX 460 1GB | X-Fi Ti Pro | A8N32-SLI Deluxe | Antec P182