If you're using Vista, or another x86 based OS, showing 3.2GB of RAM for 4GB in sticks is fairly common.. not sure what to say about your other issue, though.. sorry.
It is windows xp media edition, it is strange since when i remove one gig it will display the correct amount of ram in the computer (3gig), software limitation perhaps? and thanks for the tip, I wanted to give out as much info as possible for a solution but it can come off as spam i guess.
I think at this point i am better off just replacing the mobo & memory under warranty and not mess with anything overtly. i have one more question though should I go ahead and replace with the same memory? it seems to be compatible from the spec.
the links again:
http://www.ncix.com/products/index.php?sku=21095&vpn=996533&manufacture=MUSHKIN&promoid=1019
http://www.ncix.com/products/index.php?sku=25851&vpn=P5K-E/WIFI-AP&manufacture=ASUS&promoid=1019