Each GPU has its own memory dedicated to it, which is 1GB. However for Crossfire (and SLI) to work, the contents of the memory on each card has to be identical. That's why only 1GB of actual framebuffer is available, even though there is 2GB worth of RAM on the boards.
Strictly speaking the contents on the memory banks aren't completely identical( each GPU is working with a different picture ), which is why they can't both share the same memory.