You're confusing HyperMemory, ATI HyperMemory?
which uses system ram up to a fixed point as needed (also called TurboCache on Nvidia cards) with how Windows 7 (and Vista) report video memory. Basically what it is is a pagegfile for the video card to use if needed, nothing is taken from system ram and it is a total of the dedicated video ram and the virtual memory allocated to the video card (based on the amount of system memory and dedicated video memory),
Shared system memory is a portion of the system memory that can be used by the graphics subsystem when needed. For discrete graphics adapters, this type of memory is often referred to as “non-local video memory”—that is, far from the GPU. The shared memory is available to other subsystems or non-graphics applications when it is not being used by the graphics subsystem. Thus, it is never guaranteed to be available for graphics because it could already be in use.
from here (sorry it's a direct download link, can't find the page it originated from), http://download.microsoft.com/downlo...hicsmemory.doc
It can get a little technical, but the basic concepts are fairly easy to follow.