Yes, 32bit Windows can work with more than 32bits worth of memory, thanks to PAE (and no, it's not a "hack" and it doesn't make things slower: if you're running XP SP2 on a recent processor with XP ...
But from your brief description it sounds like the card can still only access a certain subset of memory so the driver sets up a buffer there for the device to DMA to/from and if necessary the OS sets ...
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