Comparing a 2GB system to a 4GB system, I have to disagree. You will see a notable difference while multitasking, especially with memory intensive programs. The difference between a 3GB to a 4GB I can only guess at as I've never built a 3GB system since DDRx runs best in dual channel. Intel's new processor, however breaks this mold and runs best in tri-channel.
Naturally, if all one's doing is emailing or running only one program, then no, you won't notice any difference. Windows 32 bit maxes out at 2GB "per process," basically meaning per program in a practical sense. So with even with only 3.25 (Windows does use more, it's just not "reported") you get another 1.25 GB for program use. This saves a lot of time (read: performance) as now the systems doesn't need to constantly swap memory out to the swap file on your hard drive, which is very costly, time wise.
For example, assuming the system has enough HP to do so, you'll have terrible performance if you, say render a movie and play a game at the same time on a 2 GB system, but most likely won't notice a difference on a 4GB system.
And yes, overhead memory use in the 3.25 to 4GB range does free up memory in the lower part.