Is it normal that more than half of RAM use can't be accounted for? I have a Samsung Galaxy phone and it typically says something like 705MB used 101MB free. This is a phone with like no apps except what sprint put on there. I've added up the running services and it comes to 279MB of RAM use. I can't figure out where the extra 400MB usage is coming from.
Pretty much. As Lie Ryan mentioned in his post:

Most smart phones are designed as a System-on-Chip; which means that
the CPU, RAM, GPU, device controllers, etc are all in a single chip.

The physical memory chip capacity is shared between different parts of the hardware (SoC). So the amount of memory available to your applications is what's left from the original allocation.
In addition, just like any Linux system, Android is optimised to use  as much RAM as possible, because that's how it was designed to work.
Furthermore, android system has a built in memory management system called Minifree. Basically operations like memory allocations to applications are done for example instructing the system how much RAM to leave free and available, cacheing 'often used' apps in memory, etc.
Here is the basic categories of minifree memory allocation to applications:

Foreground App: This is the application currently on the screen, and
running
Visible App: This is an application that is open, and running in the
background because it's still doing something
Secondary Server: This is a process (a service that an application
needs) this is alive and ready in case it's needed to do something e.g
launcher, UI etc.
Hidden Application: This is a process that sits idle (but still alive)
in case it's needed by an app that's alive and running
Content Provider: This is apps that provide data (content) to the
system. If they are alive, they can refresh and provide the content
they are supposed to at the set interval. If you kill them, they can't
of course. e.g Contacts, calender etc.
Empty App: These are apps that you have opened, but are done with
them. When an activity is ended, instead of killing it off Android
keeps the application in memory so that opening them again is a faster
process.

Given this whole range of minifree allocations, its possible the application may not be visible but busy carrying out useful tasks requiring RAM, also even when you've killed a given app, there are high chances is stored as an 'empty app' (meaning its lodaded into RAM so that executing the same app again will be fast).
All this occurs at the expense of overall RAM on board and as a result you always get a lower RAM reading than anticipated, since mostly is is cached as explained above.
While you can reset or tweak default minifree values, I believe seeing lower RAM readings when not using lots of applications is good since you are guaranteed execution will always be fast than starting to load an application into memory every time.
Basic notes

some RAM is shared between hardware
some RAM is allocated to hidden apps, content providers, empty apps which may not be visible in usage statistics, but its still important for improving device performance.

References

Can you upgrade the RAM of an Android device?
Memory management and its effect on multitasking