About Setting PAE ( Physical Address Extension ) in VISTA ULTIMATE 32-bit

I have just got Dell XPS M1530 with below configurations :

Intel Core 2 Duo T9300
4GB RAM
GeForce 8600 GT 256 MB
200 GB 7200 rpm drive
Intel Next-Gen Wireless
Windows Vista Ultimate
15.4 TFT TrueLife WSXGA+

I have understood that not all of the 4GB will be used by the OS.

My questions are:

1. My friend said that Vista will use approximately of 3.25 GB only and THE REST of it will be used by the graphic card. So what I get from what he said is my graphic card memory will expanded to 512MB or more. Does what I think correct? If not, what is the correct condition for my system above?

2. I also have read that to fully use all of the 4GB, I must use the Vista 64-bit and in other article, I read that there is a utility/technology named PAE ( Physical Address Extension ) which is only available for 32-bit Windows.

I was confused when I come to part that mention if I use PAE, the 32-bit Windows will use totally of 4GB and on the next part of the SAME article, it said that I must use the Vista Service Pack 1 for PAE to INDICATE/RECOGNIZE ( INDICATE ONLY, NOT USING ) the system physical memory available is 4GB.
Which one is correct?

What does PAE for if it ONLY RECOGNIZING the amount of memory available?

3. Is there any other way to fully use the 4GB RAM beside Vista 64-bit? Because it must be very difficult to get the application software for the 64-bit, and expensive of course.

4. What are the advantages using 64-bit instead of the 32-bit Windows?

Thank you very much.