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.