I did come across this and tried it using the built in administrator account but the problem is still present. I don't think I have a bad memory stick or memory slot.
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This is due to Microsoft?s limiting the operating system ?out of the box? at 3.5GB of memory.
You will need to add a switch to their BOOT.INI file in order for the operating system to completely map the entire 4GB of memory.
You can e-mail the following steps to customers who are affected by this:
1) On the desktop, right-click the My Computer icon. If My Computer is not on the desktop, click the Start button, and then right-click My Computer.
2) Scroll down and click Properties.
3) In the System Properties window, click the Advanced tab.
4) Toward the bottom of the Advanced window, look for the Startup and Recovery section.
5) Click the Settings button.
6) The Startup and Recovery window opens to the System Startup section.
7) Click the Edit button to open the Boot.Ini file in Notepad.
8) Place the cursor after /fastdetect, and then press the spacebar.
9) Type /PAE. (PAE is short for Physical Address Extension.)
The Boot.ini file should resemble this:
[boot loader]
timeout=30
default=multi(0)disk(0)rdisk(0)partition(1)\WINDOWS
[operating systems]
multi(0)disk(0)rdisk(0)partition(1)\WINDOWS="Microsoft Windows XP Professional" /fastdetect /PAE
10) In the File menu, click Save.
11) Exit Notepad, Start Up and Recovery and System Properties.
12) Restart your machine. WindowsXP should now recognize 4GB of memory.