Having lots of RAM on a video card is a sales gimmick because most people think "More is better" is always true.
Generally speaking, you do not need more than 1GB of RAM if you are using up to 1920x1200 resolution. Above 1920x1200 resolution it is recommended that you have a 2GB video card because more textures are loaded into memory in games.
At also depends on how powerful the graphic card is. A weak video card can be too slow to use all the available RAM regardless how much there is. For example, the desktop Radeon HD 5670 512MB and 1GB versions basically have the same benchmarks, at 1920x1200 resolution and above the 1GB may get 1 extra frame per second. This basically means the Radeon HD 5670 is too slow to make use of more than 512MB of RAM.
That would also means a Radeon HD 5450 1GB will also be too slow to use all 1GB of RAM, but the 1GB is an attention grabber and people may simply buy the card because of it.