Originally posted by: Shaklee3
(4x512) of ocz pc3200 ram. The bios shows 2048MB, but when I go to system properties in windows, it only shows 1.5MB and right below it, it says physical address extension.
First of all, PAE is usually used to extend Windows' address space beyond 4GB. Except... for XP it doesn't.

(MS say that many drivers for consumer hardware are sometimes not built to handle 64-bit addresses, so only 2003 uses PAE for this, and up until nVidia's 81.85 driver I thought MS did this only to force people to buy 2003 Server)
Aside from extending the address space (assuming 2003 Server), PAE has another interesting side-effect. Every memory page has a header which the OS uses for housekeeping. This header is bigger in PAE mode thus allowing the OS to tag memory pages as readonly or writable (no space left in the old non-PAE header). This is a requirement for DEP. Presto, XP supports PAE, but not more than 4GB memory. (and you have to deduct some from that, see below)
So, yeah, it'll say PAE. Doesn't really mean anything. Something else is eating half a gig worth of memory.
You wouldn't happen to have a couple of 512MB video cards in there? (PCI/AGP/PCIe devices tend to map into the virtual address space below 4GB, and although 2.5MB eaten by PCI devices would be extreme, I guess it isn't impossible...) You can check this by looking at Device Manager -> View | Resources by connection (look under Memory).
And this being a fresh installation means your boot.ini is pristine, without any bothersome /maxmem switches, right?
If you boot memtest86 -- will it see all the memory?