free -m
total used free shared buffers cached
Mem: 498 120 378 0 5 92
-/+ buffers/cache: 22 476
Swap: 255 0 255

Is this normal?

Yes, it's just how your kernel reports the figures, mine shows more


total used free shared buffers cached
Mem: 527 498 29 0 6 287
-/+ buffers/cache: 203 323
Swap: 255 101 154

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Linode is giving you your 512M, but your kernel keeps a bit of it reserved and doesn't report it as available. Check your kernel log for a line like this:

Feb  4 14:01:35 ??? kernel: Memory: 760348k/786432k available (5818k kernel code, 388k absent, 25696k reserved, 2951k data, 520k init)

That is from a linode 768, and the "786432k" divided by 1024 just happens to exactly equal 768M.

I see now. Thank you all.
I am new to Linode and Linux:)

# dmesg | grep Memory
Memory: 503652k/524288k available (5835k kernel code, 388k absent, 20248k reserved, 2894k data, 516k init)

# dmesg | grep Free
Freeing SMP alternatives: 28k freed
Freeing unused kernel memory: 516k freed
Freeing unused kernel memory: 288k freed
Freeing unused kernel memory: 464k freed

503652k + 28k + 516k + 288k + 464k = 504948k

# free
             total       used       free     shared    buffers     cached
Mem:        504948     480784      24164          0      16428     217180
-/+ buffers/cache:     247176     257772
Swap:       524284      88644     435640

The behaviour is slightly different between old-style Xen kernels (Linode "stable") and modern pv_ops kernels (Linode "latest") causing the memory usage to be reported slightly differently, but the difference is mainly just in the way it's reported.

From memory, I think it may have been something like this:

Some RAM (in this case, from the Xen instance) is needed just to load the kernel. In pv_ops kernels, inside the VM you see this as just a reduction in the number reported as system RAM whereas in a Xen kernel, inside the VM you see this as memory that exists but is used.