I noticed in the past few days my adsl modem started connecting at 1024k rather than 2560 like before (I have the 512K package). I didn't change anything so it must be something they decided to do. That is strange because it ruins the Turbo on Demand service.

I assume you are looking directly at the adsl speed of the modem, via the browser?

This refers to the adsl carrier.

It may be higher than you have signed up for, and just being throttled elsewhere in the network.

My friend and I are both signed up for a 512K service in Malaysia, his modem connects at 2048 and mine at 1024.............

All very strange, but in practice we get similar real speeds.

The speeds that the modem reports are those that you get to the DSLAM at your local exchange. Your login determines your real speed, but of course that cannot exceed the speed that you got from the DSLAM. You could have esatablished a 24mbit connection to your DSLAM, but your ISP login would still limit your effective speed (local and/or international) to whatever you paid for, say, 128k. True's lines are like this, in order to enable the use of the 2.5mbit speed on demand login, regardless of what you signed up for.

I would have said that it might be because of line deterioration, but that usually results in incremental speed loss, like from 1024k down to 768k, not something as dramatic as this. It's most likely that some engineer changed your DSLAM port config for some reason or another, on purpose or by mistake.