In a 32-bit system (non-AMD64/EM64T) you have 4GB of address space available (2^32 = 4GB). This includes RAM, however if you put in 4GB of RAM you're going to lose some because a)Windows needs to put address space somewhere, and b)your hardware needs address space. This will include things like your BIOS, VGA memory (sometimes multiple copies), AGP aperture, PCI and other subsystems. Systems with less than 4GB of RAM won't be affected as Windows will address the hardware in virtual memory.
Somebody please tell me if I got that right.