The biggest issue with a 64-bit XP is that there is a large lack of drivers for it. That was my reason for never upgrading. As for the software working, I'm fairly sure that all your current software will work, it will just be emulated to run as 32-bit.

There are hacks out there that will allow XP 32-bit to see and use 4GB of RAM but I haven't tried them, nor would I be able to help with such a task