All 32-bit client versions of Windows (not just XP/Vista/7/8/10) have a
4GB address space (64-bit versions can use much more). That's the
theoretical upper limit beyond which you can not go.
But you can't use the entire address space. Even though you have a 4GB address space, most people can only use *around* 3.1GB of RAM. That's because some of that space is used by hardware and is not available to the operating system and applications. The amount you can
use varies, depending on what hardware you have installed, but can range from as little as 2GB to as much as 3.5GB. It's usually around 3.1GB.
Note that the hardware is using the address *space*, not the actual RAM itself. If you have a greater amount of RAM, the rest of the RAM goes unused because there is no address space to map it to.
The advantage of running a 64-bit version of Windows mostly exists only if you also run 64-bit applications under it. Bear in mind that there are very few such applications available yet. If you are presently running 32-bit Windows, you don't have any 64-bit applications, so to achieve any significant advantage, you not only have to replace Windows, but also your applications, *if* (and that's a big "if") 64-bit versions exist.
Also note that you will need 64-bit drivers for all your hardware.
Those drivers may not all be available, especially if some of your
hardware is a few years old. So it's possible that you might also have to replace things like your printer, scanner, etc.
So the answer to your question is that it may not be a great idea right now. That will undoubtedly change in the near future, as 64-bit applications become more available, but for now, 64-bit Windows often means some extra trouble and expense for little or no benefit.
On the other hand, installing 64-bit Windows instead of 32-bit Windows makes you able to buy 64-bit software as it becomes available, instead of the older 32-bit versions. That means that installing 64-bit Windows--even though it may do very little for you at present--puts you into a better position for the future.
One additional point: the 64-bit version lets you use more than the approximately 3.1GB of RAM that the 32-bit version can use. Very few people need or can make effective use of more than 3.1GB, but if you are one of those who can, that's something else to consider.