You do not say anything about the nature of your applications, if those applications are DOS style (windows vista and onwards are very picky about DOS apps), your best bet is either DosBox, or FreeDos on a VM. Dosbox emulates the whole hardware enchilada, so it may be a tad slower than runing Freedos on a VM, and both solutions run on modern 64 Bit Windows... On the other hand, if your apps are Win16 or Win32, read on:
Even if the windows OS is 32 Bit, having more memory through PAE can have good effects, as each app running will have a full 3.5GB or so address space all for itself. 32 bit versions of Linux had PAE support for years. 32 bit versions of Windows do too, but artificially limits that support in consumer versions, in part as a differentiation tactic, and in part because some drivers do not behave nicely with PAE enabled.
No matter if your processor is 32 or 64 bits, what determines the "32 bitness" of the system is the OS (that is to say, a 32 bit version of the OS will behave as a 32 bit version, even if installed on 64bit HW).
As many posters said, your most cost effective route is to go with XP compatibility mode in a modern (think Windows 7) consumer version of the OS (be that a 32 or 64 bit version of the OS). The problem with XP comaptibility mode is that support for the virtualized copy ends in 2014, so the solution is very short term, and that it runs virtualized, so anything hardware intensive will be slow as molasses.
Is any of those limitations is unacceptable to you, you may run a 32 bit edition of Windows server 2003 (R2) (which is supported until 2023 (2025), give or take), activate PAE to gain access to additional memory, and then fiddle with the settings to make it behave more or less like a workstation if needed be.
If you follow the workstation route, this link may help:
http://www.msfn.org/win2k3/index.htm
word to the wise: troll the forums for hardware whose drivers play nice with PAE.
