The ISE board supports flash based models and DRAM based models. The DRAM models are intended for normal programs, as the flash is too slow to be practical for running live code. However, the flash model is necessary for writing bootstrap loaders, including application specific loaders.
Even the bootstrap.ld model uses a bit of the DRAM for the data and stack for the bootstrap loader. The bootstrap.ld model allocates 1M from the top of DRAM for use by the prom image. The bootstrap program typically releases that memory before executing a downloaded program.