maybe this will help??
@mcgvr - Sorry to resurrect an old thread, but I have this exact issue - I cannot remote desktop into my machine with the 3GB switch enabled. But when I try to apply the hotfix, it says that i have a newer service pack (I have XP SP3) and that the patch is not needed. My guess is that this fix was never included in the later SP, so is there a newer hotfix available that can be applied to SP3?