slightly incorrect.
32-bit operating systems can only utilize 2^32 bytes of ram - in other words, 4gb of ram. your system reserves a small amount for usage below the OS level, leaving you with around 3.8 or 3.9 gigabytes of ram. your video card also eats into that - so, if you've got a card with 512mb of vram, you're looking at 3.4-3.5gb of usable ram on your system. 64-bit can use 2^64 bytes of ram, which is closer to 127.5gb. like, mega-server stuff. also, in 32-bit, no one program can use more than 2gb of ram without using a (software) 3gb switch (which are notoriously glitchy to begin with). 64-bit doesn't have this limitation.
you'd think that everyone would just use 64-bit, but there's a lot of software incompatibility, particularly with drivers (the Yugo of the software world) and games. there's also the fact that a few processors (out of hundreds) can't function with x64-based systems. it's rare that you have that issue, though.
64-bit software has come miles in the last year or two, though. just check your most-used programs and make sure that they're compatible with 64-bit windows, or that there's a driver for your hardware. i'd suggest 64-bit if you can - it's going to be better in the long run.