Should be a lot better
For a 32-bit JVM running on a 64-bit host, I imagine what's left over for the heap will be whatever unfragmented virtual space is available after the JVM, it's own DLL's, and any OS 32-bit compatibility stuff has been loaded. As a wild guess I would think 3GB should be possible, but how much better that is depends on how well you are doing in 32-bit-host-land.
Also, even if you could make a giant 3GB heap, you might not want to, as this will cause GC pauses to become potentially troublesome. Some people just run more JVM's to use the extra memory rather than one giant one. I imagine they are tuning the JVM's right now to work better with giant heaps.
It's a little hard to know exactly how much better you can do. I guess your 32-bit situation can be easily determined by experiment. It's certainly hard to predict abstractly, as a lot of things factor into it, particularly because the virtual space available on 32-bit hosts is rather constrained.. The heap does need to exist in contiguous virtual memory, so fragmentation of the address space for dll's and internal use of the address space by the OS kernel will determine the range of possible allocations.
The OS will be using some of the address space for mapping HW devices and it's own dynamic allocations. While this memory is not mapped into the java process address space, the OS kernel can't access it and your address space at the same time, so it will limit the size of any program's virtual space.
Loading DLL's depends on the implementation and the release of the JVM. Loading the OS kernel depends on a huge number of things, the release, the HW, how many things it has mapped so far since the last reboot, who knows...
In summary
I bet you get 1-2 GB in 32-bit-land, and about 3 in 64-bit, so an overall improvement of about 2x.