If you went to http://www.java.com/
and clicked on the big red "Agree and Start Free Download" button, you got 32 bit Java. This would be consistent with what you describe, because 32 bit Java cannot, ever, under any circumstances, allocate more than about 1.6 GB of memory, and generally it's a bad idea to go over 1.2.
To make certain you have 64 bit Java, first, uninstall all versions of Java, and reboot. Then go to http://www.java.com
, go to the download page, and find the link at the bottom that says "Not the right operating system? See all Java downloads." and choose "Windows Offline (64-bit)".
If I not mistaken, you can verify which version of Java you've got with Gather Debug Information under the Help menu. One of the top sections will be Java Information. If it doesn't say 64 bit in there somewhere, it isn't 64 bit.