A 32-bit system will recognize up to 4GB of RAM regardless of the 3GB switch setting. Actually, on XP, it will show 3.5GB in the properties even though the system has 4GB. I recommend NOT setting the 3GB switch if you are running Windows 7 32-bit with 4GB of RAM or less. On Windows XP, the 3GB switch can cause some graphics problems that most users would not appreciate. If you need more than 4GB of RAM you MUST have a 64-bit system.
The 3GB switch IS needed if you want any one process to be able to access more than 2GB of virtual memory (on a 32 bit machine). From another website:
To enable the 3GB switch on Windows Vista™ or Windows 7: 1. Right-click Command Prompt in the Accessories program group of the Start menu. Click Run as Administrator. 2. At the command prompt, enter "bcdedit /set IncreaseUserVa 3072" 3. Restart the computer. To disable the 3GB switch: 1. Right-click on Command Prompt in the Accessories program group of the Start menu. Click Run as Administrator. 2. At the command prompt, enter "bcdedit /deletevalue IncreaseUserVa" 3. Restart the computer.