Look at this thread for some good info :
http://seclists.org/lists/linux-kern.../Aug/0383.html
Basically, if you want to be able to use more than 1 GB (for large image editing or big databases et. al.) you need to
install and run one of the *up-1GB* kernels.
Hovever, from your current kernel, it looks like you have a dual CPU system and there seems to be no official *smb-1GB* kernel so you might have to compile one yourself.
In that case it's under "Processor type and features" -> "High memory support".
Choose 4GB (and don't forget "Symmetric multi-processing support")
- Peder