Memory interfacing with 8086
When the 1MB of memory is referred to, do the books refer to the ROM and RAM of the computer. Is the ROM + RAM = 1MB of memory interfaced?


Correct. The CPU does not distinguish between RAM and ROM; the 1 MB address space is shared between both.


  If yes, when memory mapped I/O is shown as a memory segment in this 1MB memory space.....do they mean that the I/O ports is taking some of the RAM memory?


Sort of. I/O ports (as used by the IN and OUT instructions) are technically a separate address space on x86, and do not occupy memory address space.

Memory-mapped peripherals, however, are accessed like memory, and occupy memory address space (which they share with RAM and ROM).