You set aside both RAM and video memory when you create your VM. I gave 512
MBs of my RAM and 64 MBs to video in my XP VM. Memory usage would reflect
those numbers and should not exceed what you have set aside.

What I am asking is, does that video memory come from my RAM or my graphics
card?

Considering that one of the ideas behind virtualization is to divorce the OS
from the hardware, I'd guess the VM's video memory is taken from the host's RAM.

They are distinct. RAM comes from RAM and video memory is from your graphics
card.

From the VirtualBox documentation:

"Video memory size
This sets the size of the memory provided by the virtual graphics card available
to the guest, in MB. As with the main memory, the specified amount will be
allocated from the host's resident memory. Based on the amount of video memory,
higher resolutions and color depths may be available."

www.virtualbox.org/.../ch03.html#settings-display