The "Available System Memory" statistic is provided by the JVM itself, so the server status page is just passing this information along -- for whatever it is worth.
Unforrtunately, it doesn't seem to be worth a whole lot in practice.
On many UNIX systems this statistic is utterly meaningless -- as the OS automatically uses more and more of the free memory as a disk IO cache. That's great, since the OS will automatically provide this memory to processes for other purposes as needed and in the mean time IO performance is improved. The problem is that the OS calls made by the JVM to obtain this statistic don't consider such disk cache memory as "available" or "free", so you'll generally see almost no physical memory available on a UNIX machine if it has been running for any substantial period of time.
On Windows I believe this statistic might be somewhat more meaningful, but still I'd not really put too much stock in it -- unless/until you verify that this statistic really seems to indicate something meaningful.
A final note: Java processes grab large blocks of memory for their heap, perm gen, etc. In cases they won't grab the maximum possible immediately (depending on one's configuration), but after one's has experienced a period of reasonably high load these blocks are likely to have grown as large as they will. After that point the OS doesn't necessarily need a huge amount of free memory -- as the JVM's have grabbed their own free memory pools for various usages.