Quote, Originally Posted by P
Zombie answer, but basically it was like this: On a processor that supported PAE - which is anything newer than the Pentium Pro in 1995 - the BIOS could elevate part of your memory so that it was above the 4 GB limit. Addressing-wise, you'd have (say) 2 GB of memory from 0-2GB, then the other hardware, and then some more memory from 4 GB and up. This way you could use the full 4 GB of RAM, at least - and with some BIOSes, even more than that up to 64 GB total. This little hack required support from the OS, and Windows XP did support that - before Service Pack 2.
Apparently many drivers out there, particularly ones from a certain graphics developer with a name that begins with N, violated a number of driver writing guidelines and crashed when confronted with addressing space above 4 GB. MS simply yanked the feature from XP with the introduction of Service Pack 2. By then, 64-bit XP (which is a client version of Windows Server 2003 rather than a true port of XP 32-bit) was out, and MS thought it better if everyone with such "extreme" memory requirements used that. Anyway - the switch to enable PAE mode was left in XP SP2, even if it didn't really do anything any more.