Windows XP (or any 32-bit OS) can only handle 3GB of ram, this is true.
Installing 64bit XP would work, but you may run into software or driver issues. 64-bit OSes require different drivers, so make sure everything in your system (hardware) would first be compatible.
As a graphic designer, having more than 3GB of RAM would be beneficial running memory-hungry apps with large document sizes. Personally, I do my design work on a Mac because it has 4GB and handles running several design applications (Adobe Suite) MUCH better than a PC does. But if you must use a PC, 3GB is a relatively decent amount of memory, but if you're doing LARGE file sizes (i.e. Banners, Large Posters, extremely high resolution files, etc), the more RAM you have the better your system will run.
If you're doing graphic design for websites, or smaller print work, 3GB of RAM will be fine.
Adobe, as far as I know, is going to be a 64bit application in CS4. I do not believe they support 64bit yet, but that's not to say I've tried it or it will or will not work on a 64bit system.
I would be wary of future compatibility issues with Windows XP 64 bit, if you choose to go with it. 32bit programs SHOULD run fine in a 64bit environment, but will not take advantage of the 64bit architecture.
Me personally, I'd get the 32bit with 3GB RAM.