Maximum RAM for 32 bit system

Hello, there.
I am runing Ubuntu 10.04 32 bit version with an Intel Core Duo and 3 GB of RAM installed.
A while ago, I was advised not to add more memory to it [to make it 4 GB in total], because the O.S. would not be capable of using it [being a 32 bit version of the O.S. -- that's what I was informed then].
But recently I began digging a bit and now I am confused...: it seems that 32 bit systems can handle up to [and including] 4 GB of RAM -- but no more -- but that contradicts what I was told then; so I decided to come here to dispel my doubts.
Should I pay for the extra RAM, safe in the knowledge that my O.S. will benefit from it or should I not because, after all, Ubuntu 32 bit version will not 'see' more than 3 GB of RAM?
Thanking you in advance.