XP manages to address (only) 4 GB RAM, but you'll have less available (3 to 3.5 GB) because windows uses the first GB for addressing data to your graphics card, sound card, harddrive and other hardware.
It is useless to install more than 4 GB on Windows XP 32 bit and Windows Vista 32 bit.
The Vista 64 bit version is capable to address more RAM:
Home Basic 8 GB
Home Premium 16 GB
Ultimate, Business and Enterprise more than 128 GB
The XP 64 bit version can also address more RAM, but no one wants to have XP 64 bit.
The Lite Harbor Mod reduces the number of ships in the harbors. You'll have a smoother gameplay only in the harbors.
Lag at sea indicates a convoy nearby! Dive and do a personal hydrosweep.
Good hunting!