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First of all, you will need to upgrade to a 64bit OS to be able to use all of your 4GB of RAM. You are probably getting access to somewhere around 3-3.5GB at the moment.
Also depending on some options in the BIOS (and DELL's tend to be on the low performance/stability first side), you might actually only be getting access to 2GB of RAM.
Run Task Manager to find the total RAM available.
That reports physical memory as 3069 and the resource manager reports about 50% memory usage so you're correct about access to RAM.
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I would try updating the Graphics drivers. Use ATI drivers rather than DELL ones. Also I would imagine the integrated graphics on the HP are limited to a maximum of 256MB of RAM and probably only 128MB. So that would suggest the amount of graphics memory isn't the problem.
Drivers are all ATI and using the update button results in a message that I already have the latest best drivers for that card.
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Tommorow I will dig out an old 64MB graphics card and see if I can edit FullHD, and then report back.
I sure didn't mean to put anyone to work here! But I sure do appreciate the interest and information. I didn't suspect amount of memory to be the problem but these cards seem to be made for the gamers and I've seen references in other forums about video folks having some issues with that card.
Thanks a lot!
Bif