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Does this mean that the 32bit Vista is using all the 4x 1024mb RAM but only 3GB because the other 1GB is beeing used to address space.
All 4GB is physically there, but the 32bit OS is ignoring the 1GB because it has no way to access it, since all the addresses are used up.
Imagine a street where the address of the first house is 1 and the address of the last house is 100. Clearly, you can only have 100 "normal" address on such a street, and so you can only deliver mail to at most 100 different houses on that street. Even if there are physically 150 houses on the street, 50 won't be able to get mail, or will have to make arrangements to get more addresses for the street (e.g. 64-bit address space instead of 32-bit) so they can have addresses, or will have to make arrangements to share a single address between 2 or more houses (this is analogous to what can be done now on certain 32-bit OSs, but it requires special programming in both the apps and the OS).
Now if the postal service comes in and builds a distribution center on the street and takes up addresses 1-10 for that center, even though there are still 100 houses on the street, now only at most 90 houses can have their own address and so get mail, and 10 houses will be ignored. This is the type of situation you are seeing with your RAM.
I use the system alot for video editin and think it is important to get fully use of all the 4 GB RAM, should i get the 64bit Vista version instead? will my computer be better suited then?
Yes, as long as all your programs will run on 64-bit Vista and all your hardware has 64-bit drivers available. Since Vista is just being released, I would wait six months or so for the main bugs to be discovered and worked out, and for all the vendors to release 64-bit software and drivers, before switching over. It won't hurt the RAM to be "ignored" for a few months.