Which figure are you looking at for 'used' memory?
Cached memory can be assumed to be free memory.
Have a look at how your system is handling paging and set to windows managed and see if that makes a difference.
Start Menu - right click on Computer - select Properties
On the Advanced tab click on Settings under the Performance section.
Under Virtual Memory, click Change.
Make sure that 'Automatically Manage Page Filing" is selected. On the same window at the bottom it should give a figure for 'currently allocated'. What is that figure?