First, Windows XP (32bit) only supports 4 gigs. That doesn't just apply to Windows XP. Instead, it applies to all 32bit OS. You will never see over 4 gigs if you are using a 32-bit Windows XP. However, I did find a more detail reason why your system shows less available ram than what is actually installed.
The 3GB-not-4GB RAM problem - Microsoft MSDN Blog (Source)
Due to an architectural decision made long ago, if you have 4GB of physical RAM installed, Windows is only able to report a portion of the physical 4GB of RAM (ranges from ~2.75GB to 3.5GB depending on the devices installed, motherboard's chipset & BIOS).
This behavior is due to "memory mapped IO reservations". Those reservations overlay the physical address space and mask out those physical addresses so that they cannot be used for working memory. This is independent of the OS running on the machine.
Significant chunks of address space below 4GB (the highest address accessible via 32-bit) get reserved for use by system hardware:
- BIOS – including ACPI and legacy video support
- PCI bus including bridges etc.
- PCI Express support will reserve at least 256MB, up to 768MB depending on graphics card installed memory
What this means is a typical system may see between ~256MB and 1GB of address space below 4GB reserved for hardware use that the OS cannot access. Intel chipset specs are pretty good at explaining what address ranges gets reserved by default and in some cases call out that 1.5GB is always reserved and thus inaccessible to Windows.
There is more information if you check out the source. However, you may be able to take advantage of the full 8 gigs installed if you followed these instructions.
Speaking from personal experience, this is no new problem. I ran in to this same problem a few years ago when I built a 4-gig 32-bit Windows Vista system when Vista was first released. There were countless forum posts online related to this same topic.