Windows – 8gb ram in 32bit operating system

There's only a single binary of VMware Workstation, which supports both 32 and 64-bit hosts (even though it gets installed in "Program Files (x86)" on Windows x64).

The vmware.exe process is just the front-end and it's always 32-bit, but the actual virtual machines (vmware-vmx.exe) are 64-bit on 64-bit hosts.

Because it (probably) has 1GB of video memory, which has to be taken out of the 32 bit Vista 4GB address space.

32 bit Windows has to share 4GB between physical memory and all of the memory mapped devices installed in the system. That's why you typically only have access to a bit more than 3GB of memory even with a lesser graphics card.

If you move to 64-bit Windows, the address space is much larger so you won't run into that issue and will get your full installed RAM. One downside though is that programs will actually use more memory, mostly because the size of pointers is larger.

EDIT:

It doesn't matter that the card has it's own memory. You still need address space for it's memory to be mapped into. I just noticed in the post that it's a 512MB card not a 1GB card, so there may be something else at work beyond the delta of 256MB that you will lose from the address space for the increase in card memory.