Determine Whether 32 or 64 bit

I installed Windows 7 Home Premium using the 64 bit installation disc on my computer which has an Intel Q9650 cpu and 8 Gb of DDR2 1066 RAM.

However - opening Control Panel > System the information shows that I have
8 GB RAM installed (3.25 usable)
32 bit operating system

How can that be - I definitely used the 64 bit Windows 7 installation disc (latest retail version).

There are some unoffical versions available with both on the same DVD. In this case, you may have put in the wrong key.
Otherwise, if you are using a genuine retail version, then,
1. You used the wrong DVD or,
2. The DVD's are incorrectly labelled.

If you look under Computer Properties which version does it say you are using?

Control Panel >> System and Security >> System
"Windows Logo + Pause" will also take you there.

Look under System and then System Type

I think that is where he looked and found the "32Bit" version?