This post discusses the reasons for moving to 64-bit VM and the performance characteristics of 64-bit machine vs. 32-bit VMs
It's based on the HotSpot VM FAQ (http://java.sun.com/developer/technicalArticles/Programming/HPROF.html) .

On a 32-bit Windows systems, the maximum heap size per Java VM process ranges between 1.5 to 1.6 GB (in practice).
You can see the explanation here: 32-bit Windows and JVM virtual memory limit (http://sinewalker.wordpress.com/2007/03/04/32-bit-windows-and-jvm-virtua...)

If your application requires a larger heap, you should use a 64-bit VM. The primary advantage of running Java in a 64-bit environment is the larger address space.
This allows for a larger Java heap size and an increased maximum number of Java Threads.
It's important to note that 64-bit implementation doesn't mean that that built-in Java types (such as integers) are doubled in size from 32 to 64.