With continued further research, I found out that this is an issue within Windows 7, and has nothing to do with my Intel DP43TF motherboard/
If i go to Msconfig > Boot > advanced option > Maximum memory > change it to 4088 from 4096 or any other value and restart,
The RAM is detected now as 3.25GB.
This was not the case with Vista x64.
If i leave it unchecked, 4GB RAM is again detected and used properly.
This is how I corrected the issue, but at this point further testing is needed to insure that everthing is as it should be.
I am using the latest BIOS. As I attempted to say in my last posting, this was a Windows Issue, NOT an Intel Desktop Board issue. I have since confirmed with Microsoft Support that this was the proper way to correct this type of issue. Having the mempry box checked in the Advance Options, limits the memory to 3.25GB