cannot get linux to recognize 128 megs of ram

I believe it must be an upper case M. I just looked at mine and it is. Also you can not have more than one append line for each booting option.
append="hdd=ide-scsi mem=128M"
not
append="hdd=ide-scsi"
append="mem=128M"
I believe the append should be above read-only. Hope you have a boot disk.
I always make a second boot option when I edit lilo.conf, that way if it fails I can boot the other one.

yep, must be capital M, and it should reside in the global part of lilo.conf

gah.. ignore my "and it should reside in the global part of lilo.conf" :)

j2 changed the proposed answer to a comment

That's not it

[root@A-K23 scott]# more /etc/lilo.conf boot=/dev/hda map=/boot/map install=/boot/boot.b default=linux keytable=/boot/us.klt prompt timeout=50 message=/boot/message other=/dev/hda1         label=windows         table=/dev/hda other=/dev/fd0         label=floppy         unsafe image=/boot/vmlinuz         label=linux         root=/dev/hda5         append="mem=128M"         read-only [root@A-K23 scott]# more /proc/meminfo         total:    used:    free:  shared: buffers:  cached: Mem:  65576960 63987712  1589248 29384704   331776 14315520 Swap: 381583360 16187392 365395968 MemTotal:     64040 kB MemFree:       1552 kB MemShared:    28696 kB Buffers:        324 kB Cached:       13980 kB BigTotal:         0 kB BigFree:          0 kB SwapTotal:   372640 kB SwapFree:    356832 kB  

yuck ... that's hard to read
[root@A-K23 scott]# more /etc/lilo.conf
 boot=/dev/hda map=/boot/map
 install=/boot/boot.b default=linux
 keytable=/boot/us.klt prompt timeout=50
 message=/boot/message other=/dev/hda1  
       label=windows         table=/dev/hda other=/dev/fd0        
 label=floppy        
unsafe
image=/boot/vmlinuz        
label=linux        
root=/dev/hda5        
append="mem=128M"        
read-only [root@A-K23 scott]# more /proc/meminfo        
total:    used:    free:  shared: buffers:  cached: Mem:  65576960 63987712  1589248 29384704   331776 14315520
Swap: 381583360 16187392 365395968
MemTotal:     64040 kB MemFree:      
1552 kB MemShared:    28696 kB Buffers:        324 kB Cached:       13980 kB BigTotal:         0 kB BigFree:          0 kB SwapTotal:   372640 kB SwapFree:    356832 kB  

append must de directly after label, OR in the "global" section. (that is, before the boot entries)

If that still doesnt work, it is a hardware/BIOS problem.

what the hell?  This company is going to hear from me.  What vendor is your motherboard made by?  Did they ever help you out?  Is this normal?  Bastards.