From time to time, especially developers working with windows, run into problems with JVMs maximum heap. Although in theory the maximum heap on 32bit OS should be 4 GB, it is actually on windows less than a half of the theoretical setting. The actual number is around 1.4GB, it is hard to reach 1.5GB. I found several resources, which point to the causes of this behavior. This older entry, explains the reasons (windows systems reserve some memory for "private use", which is no more available for applications). It contains some links to MSDN as well. This bug report, explains the behavior, as a problem in the JDK's dll. It mentions also, that other JVMs (like JRockit) are able to handle slightly more maximum heap. However on my Vista 32bit machine (3GB RAM), the highest heap I was able to set up was 1626m (it isn't able to start with 1628m...sometimes with 1629m it varies,) with Sun's JVM. I tested it with the SwingSet, the Swing demo application: java -Xmx1620m -jar SwingSet2.jar
If you are interested in GC/JVM tuning, this whitepaper is a good resource. It explains the default settings, tuning ideas and ergonomics in great detail.