You have an Integrated graphics processor, which means your RAM is shared with it.. The missing 128mb is being used by your GPU..
Also, the Mobility Radeon X300 (your GPU) on your laptop is capable of up to 256mb ONLY, so increasing your RAM wont increase your VRAM. Yours is set at 128mb, thats why you can see 896mb RAM, check out the BIOS if you want change it to 256mb. But that would further decrease your available RAM.