You are confusing 2 types of memory with eachother. Harddrive space and RAM memory to be precise.

To check your harddrive space:
Go to "My Computer"
Doubleclick it
Rightclick the "C:" disk, choose properties
It should say the correct space there

RAM memory is much faster and much smaller then your harddrive, this is where the computer loads and processes stuff you have running. Even this screen you are reading now