Things should be pretty clear with the link Karan gave.......just to add my 2 cents...
32 Bit OS is capable of addressing 4 GB or RAM (2^32 is 4GB), but 4GB limit in 32bit OS includes both physical and virtual RAM. That is how the architecture of 32 bit OS is.
If you install four 1GB memory modules, the system may detect less than 3GB of total memory because of address space allocation. This limitation applies to 32-bit version operating system since it does not support PAE (Physical Address Extension) mode.
Now however one can use the PAE switch to make the OS utilize the address space above 4GB, the catch is ......applications have to be written specifically to take advantage of PAE
So, PAE won’t make your Photoshop or office app any faster.
The best possible solution is to switch to 64bit OS. A 64 bit OS would atleast give you access to your full address space. And today we anyhow have loads of application written to utilize true potential of 64 bit architecture.
For some in depth knowldge of address allocation you might want to look at the following segment taken from Official microsoft explanation........
Quote:
Microsoft Windows XP Professional, designed as a 32-bit OS, supports an address range of up to 4 GB for virtual memory addresses and up to 4 GB for physical memory addresses. Because the physical memory addresses are sub-divided to manage both the computer’s PCI memory address range (also known as MMIO) and RAM, the amount of available RAM is always less than 4 GB.
The PCI memory addresses starting down from 4 GB are used for things like the BIOS, IO cards, networking, PCI hubs, bus bridges, PCI-Express, and video/graphics cards. The BIOS takes up about 512 KB starting from the very top address. Then each of the other items mentioned are allocated address ranges below the BIOS range. The largest block of addresses is allocated for today’s high performance graphics cards which need addresses for at least the amount of memory on the graphics card. The net result is that a high performance x86-based computer may allocate 512 MB to more than 1 GB for the PCI memory address range before any RAM (physical user memory) addresses are allocated.
RAM starts from address 0. The BIOS allocates RAM from 0 up to the bottom of the PCI memory addresses mentioned above, typically limiting available RAM to between 3 GB and 3.4 GB.
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