I'd stay with XP 32-bit. Single core processors tend to be a bit sluggish on the newer kernels. Avoiding Vista goes almost without saying.
As for the whole 32 vs 64-bit memory-wise, the 4 GB limit is imposed by Microsoft, not hardware per se.
There is a technique of memory addressing known as PAE (physical address extension)
. A PAE-capable kernel is able to access memory addresses as if it were 36-bit, and as such, it is theoretically capable of accessing 64GB of RAM. There is a list of Windows OSs and their respective RAM limits, source of which can be found here
As you can see, even the Server 2003 (which uses the same kernel (core) as XP) is able to address > 4GB with PAE enabled. There are kernel hacks floating around the web that allow XP 32-bit to do the same, however, system protections in place would mean you need to run it in debugging mode all the time, which is inconvenient. But the conclusion remains, Microsoft has intentionally hard-coded an artificial limit, so as to "better" differentiate between various product lines and their capabilities.
Much like Vista Starter is limited to 1GB and 7 Starter to 2GB of RAM.