In windows, every machine has a 4GB address space. It's 2GB for the app, and 2GB for the OS in 32 bit systems. You can allocate more to SQL, but you need to /3GB switch, which will get you 3GB for SQL. you can go beyond that in terms of how physical memory is allocated, but it's swapped in and out of the 2 or 3GB space.

What version/edition of SQL?