How can I increase my usable RAM to 4GB in Windows 7 - 32bit?

32-bit Windows 7 is hard-coded only address 4GB of TOTAL memory. If you have 4GB of RAM and 1GB of Video RAM, your video card gets 1GB which means now Windows only has 3GB of memory left to address (even though you have 4GB of free RAM). The other 0.47GB is likely reserved for other hardware components (or just buffer that your chipset reserved). You can actually dig into the Device Manager and (with a little math) figure out exactly how much memory is reserved for each component. Mark Russinovich has a very detailed/technical article about this here: http://blogs.technet.com/b/markrussinovich/archive/2008/07/21/3092070.aspx

PAE is a feature that allows addressing more than 4GB of memory with 32-bits. I *believe* Win7 32-bit installs the PAE kernel (ntkrnlpa.exe or ntkrpamp.exe in c:\windows\system32) because it has other features for newer CPUs, but even the PAE-enabled kernel is still hard-coded for a 4GB max addressable memory (http://en.wikipedia.org/wiki/Physical_Address_Extension#Microsoft_Windows). So I would guess that the patch tries to hack in and remove the 4GB limit so you can fully use PAE to address more than 4GB. Aside from possibly violating the Windows license agreement, you might not see any problems. Or you might eventually see some of the problems that Mark Russinovich described as possible when client systems use PAE for >4GB:

What they found was that many of the systems would crash, hang, or become unbootable because some device drivers, commonly those for video and audio devices that are found typically on clients but not servers, were not programmed to expect physical addresses larger than 4GB. As a result, the drivers truncated such addresses, resulting in memory corruptions and corruption side effects. Server systems commonly have more generic devices and with simpler and more stable drivers, and therefore hadn't generally surfaced these problems. The problematic client driver ecosystem led to the decision for client SKUs to ignore physical memory that resides above 4GB, even though they can theoretically address it.