Windows XP 32-bit will only let you use 3GB of RAM... that's a limitation of the Windows software itself, is perfectly normal, and does not indicate anything wrong with anything.
Plenty of articles on this via Google:
http://www.google.com/search?q=windo...ient=firefox-a
Also, the 32GB size limit on hard drive size is imposed by the Windows formatter... FAT32 can be formatted to something bigger than 32GB, but certain Windows versions will only let you format them to a maximum size and will only "see" the partition if it's 32GB or less.