It has the same limitations as XP does, due to the whole remapping of PCI address space. For me, I only had access to 2.9GB in Vista32.
I ended up biting the bullet this weekend and moved up to Vista x64. Went very smooth; no compatibility problems with anything (yet?). 64 bit LAME encoder runs 40% faster! Nice to have 4GB finally. I was suffering for a while under XP with just two 2GB of RAM. While building a new machine last month with 4GB, that's when I learned about the whole 4GB 'issue' under XPPro and Vista32.
I installed Vista 64 on a new build with 4 gigs of Crucial Ballistix PC2-8000 memory and a QX6700, and noted DVDShrink's MPEG2 recoder would do a shrink to 60% original size, using all 4 cores about equally according to performance monitor, in about 1/5th the time required on my old P4 2.56Ghz system with 512MB. However I eventually had to go back to XP 32-bit because Vista would lock up the system several times a day. So now XP Media Center reports my 4 gigs as 2.75 gigs
I'm going to reinstall Vista in another partition and dual-boot, meanwhile hoping MS and eVGA and Creative release patches and certified drivers so that maybe I can dump XP for once and for all.