Vostro 1700, Geforce 8600GT shows 1008MB memory in dxdiag

I have a Vostro 1700 with the 8600GT that is suppose to have 256mb of dedicated video RAM for the video card. I ran dxdiag and on the display tab, the approximate total memory shows 1008MB. I have 2GB of system ram installed. why is the video memory so high? is it using shared system ram to make this 1GB? i should be good with just the 256mb of video ram. does this effect system performance?