Onboard video has no memory of it's own. Whatever memory it uses comes from your RAM. That memory assignment is done within the BIOS screens. Since each BIOS is pretty much unique to that particular model, I won't try to tell you where to find it on your machine. Reboot, and press "del" or "F2", that should take you to the BIOS screen, then just hunt for it.
How much to assign? Depends on two things. 1 - how much memory do you have? 2 - how important is video to you? More memory means somewhat better performance, but if you don't have tons of memory, you may be hurting other performance parameters.
With 1 gig of memory available, I wouldn't assign more than 64MB of memory to video. With 2 gig, 128MB seems reasonable, 256 might be a little better depending on your priorities. With 4 gig, definitely assign 256MB. More if you feel like it, but I don't think it will improve performance much, if any.
Machines that aren't tweaked to your liking probably assign 8 or 16MB of memory by default - at least, that's what I've seen. And, yes, all that memory comes from your installed RAM.
You are right - better PCI cards, AGP and PCIe cards have their own onboard memory, completely independent of installed RAM. Physical memory chips are installed on the card, and you need not tweak anything at all. (I suspect that any attempt to "tweak" them is likely to screw things up, unless you REALLY know what you're doing)
Hope that helps!
