Hello, and welcome to Seven Forums. I noticed that you have yet to fill out your system specs on your profile. Doing so will help us assist you with any future problems you may have.
To do this, all you need to do is go into your User Control Panel
, and click Edit Specs
As for your current issue: Official Intel specs
for that CPU say it had 64-bit instruction set, but only 32-bit physical address extension. I am pretty sure that is the RAM issue.
EDIT: Some more Google searching... Also have you tried making sure PAE is enabled in your BIOS. That might help.
As for CPU usage, have you checked to see which processes are using the most CPU in Task Manager?
Also, it looks like you may be able to upgrade to a Core 2 LGA775, which would likely be a significant improvement over a Pentium D, especially if your PC can use the quad.