Yes, even though 32-bit Vista says it supports up to 4GB RAM, there is only approximately 3.3GB of addressable memory, as Vista reserves upper memory space for hardware usage.
Ditto for 32-bit XP, although applications cannot access more than 2GB (see MS site for more details).
64-bit versions of Vista support at least 8GB, rising to 128GB for higher-end editions. 64-bit XP supports 128GB IIRC.
So don't replace your RAM, replace your OS! You have a 64-bit processor...