This is not too surprising, and the official Nokia N900 website specs...

Up to 1 GB of application memory (256 MB RAM, 768 MB virtual memory)

is spot on with:

http://wiki.maemo.org/Documentation/...opt_and_MyDocs

Unfortunately, the fact that 100MB is free of the 256MB (rest used by the system) is somewhat disheartening.

I don't see this as being fixed by Nokia as a bug, its what they reported in the first place and developers will work around it as they already have.