sh4.exe in your main game folder is the executable, the actual program that runs the game. It was designed a few years ago, before we users tended to have computers with more than one gigabyte of RAM, so that executable only uses a fraction of your machine's available memory. Making sh4.exe large address aware means telling the executable to use more RAM. I always try it as one of the first steps in troubleshooting issues with older programs, along with running as administrator. If you have three gigs of RAM I don't think it can hurt, and may help.
Awhile back I found this little program that makes it very easy:
link
I hope that helps. Anyway, it solved my green screen issues.