A question I never thought about. I just installed 2GBs of memory bringing my total to 4GB. I ordered the extra for when I'm booting the Win7. Now I know XP isn't able to use 4 gigs, and I was wondering is the RAM still running in Dual channel in XP? And how does the system use it, or what part of the memory does the system utilize? How does it split it up?

This is an odd question coming from you Payton....
If you have two sticks of the same size, then they can be configured on a HARDWARE level to support Dual Channel. It has nothing to do with the OS or software.
Dual Channel has nothing to do with the amount of addressable DRAM, just the access speed as there are 2 instead of 1 DRAM accesses per fetch cycle.
A typical DDR setup supports Dual Channel on pairs of sockets, so typically you'll have 2 different colored DRAM sockets. If you use the same colored socket for both sticks then they'll run in Dual Channel at the lowest clocking level supported by the DIMMS.
Three sticks will break Dual Channel, and 4 sticks may still work in Dual Channel but at a lower clocking level than the individual SIMMs are rated to, due to limitations of the memory access controller.

Well the RAM (4x1GB) is still running at 1068MHz What I was wondering is does the system use only 3 sticks, or does it grab the available 3GBs from any of the sticks where the memory is available? In other words are all four sticks available to the system for accessing memory even though it's limited to the 3GB's?

Yes.
If on your boot screen you see Dual Channel, it is running dual channel across all 4 sticks.
But your OS can only see the first 3GB of the available DRAM.

K thanks.

If you disable the bios logo, you should be able to see if your memory is running in 64 bit mode or 128.

128-bit means dual channel. I am sure there are windows tools like cpu-z, everest or sandra that can tell you if it's running dual channel or not.

Yup. CPU-z provides that datum in the "memory" tab.