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One of the biggest practical differences is how much memory it can address and how much memory it can allocate to an application such as a game. In 32 bit, for most games it will be limited to, I think, just over 3gb using a 32bit like Win XP (still need mem for the O/S layer). But with 64b Win running it (in 32b mode of which most games are still native in) can allocate the full 4gb (ie 2 to the power of 32).

If the app is native 64bit, then many GB's can be allocated to the app however that also depends on which version of Win 64 you have as Win7 Pro 64b can address 192gb but Win7 Home Pre can address only 16gb.

Now the benefit of all this memory addressing comes into play on games a lot. I play Aion and when I switched from Win XP 32b to Win7 64b, Windows could allocate more memory to it without the need for having to shift the program in and off the HDD as much. The game now runs a lot less stuttered, but I did increase my physical RAM from 2gb to 6gb as well.