the only time this is true, is if you have integrated graphics chip, then system ram acts as video ram.
but if you have a dedicated graphics card the extra system ram will not be added to the video ram.
it only helps if you alt+tab to another program while playing.
the game will stay in ram and take less time to bring back up again.
is this a laptop or desktop?
if laptop, it's probably just the chipset, you can assign as much system memory to it up to 512mb.
if desktop, it's a dedicated graphics card and has its own memory.