This sounds like the PCI hole to me. Certain regions of the physical address space are reserved for the purpose of communication with video cards and other PCI devices, rendering the memory in these regions inaccessible. This does not mean that this memory is actually being used by these devices, it means that this memory is in a part of the address space that is mapped to the memory in these devices and not to the system's physical memory.
As an example, when the high-performance GPU is activated on my laptop, 256 MB of memory becomes unavailable, leaving 7.75 GB of memory. If I only use the low-power GPU, all 8 GB of memory are available.
It appears that the computer cannot support more than 1 GB of physical memory because if 1 GB of memory is enough to reach the PCI hole, than 1 GB is probably the top of the physical address space supported by the motherboard.