If your friends computer has onboard video it uses the physical RAM for its video. Some computers (i.e. HP and Compaq) use the memory and upon boot it shows the memory AFTER the onboard video has subtracted what it needs. As far as the hard drive goes you can buy a new 40 gig and format it and it will show up as less due to the file table and partition tables needing to take up their own space. For instance on my computer I have a 40 gig and a 80 gig and my 80 gig shows up as the following:

80 = 74.5 GB

It's just what happens when you format the drive. If you really wanna take a loss format a 120 GB NTFS style and are only left with 117 GB of space. Again, this is due to the file table and partition table being written to the disk. The larger the drive the more space you lose.