Low system resources

After using recovery disk from Dell to do clean install of the sytem on a GX240 we noticed the sytem resources are extremely low. Sytem has 128 MB RAM with only 13.6 MB available.

NO other programs installed. I then installed Office XP and rebooted. As I open different programs the system resource level changes to 17MB, then 33.2 MB and down to 11 MB.

What is happening? I thought I understood resources but am now not quite sure.