>> what does it mean to say we have a 32-bit processor ?!!
In very dummy terms it means the processor would process 32-bits in one machine cycle. Say if it's 2GHz processor, it'll process 32-bits 2 giga-times a second.
A 32 bit processor can address upto 32 bit long memory addresses. This directly translates to virtual memory space of 2^32.
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