That's just saying that of the 512MB you have, roughly half of it is currently being used, leaving round about 256MB avaliable.
On my system information (start>all programs>accesories>system tools) program it mentions my physical memory as being 512. I have 512 of ram, but it says I only have 252.35 available. Does that mean I am running on less ram I have installed, or am I just kidding myself?