In short:
- Windows XP Pro 32bit can handle up to 4GB of RAM.
- A program running in Windows XP Pro 32bit can access up to 2GB of RAM.
- A program running in Windows XP Pro 32bit with the /3GB switch in boot.ini can access up to 3GB of RAM.
More at http://forums.guru3d.com/showthread.php?t=187977