The official list of supported operating systems, service packs, and numbers of virtual processors can be found here: http://support.microsoft.com/kb/954958/en-us. If you are willing to venture into unsupported territory, you might find some surprises. I have both 32 and 64 bit Windows 2003 R2 Service Pack 2 virtual machines running with four virtual processors. The same is true of Vista Service Pack 1.

Also of interest is what happens with PAE. Hyper-V requires that hardware Data Execution Prevention (DEP) be enabled in the BIOS. Intel calls this hardware feature the execute disable (XD) bit. AMD calls it no-execute page protection (NX). When DEP is enabled, Windows automatically enables Physical Address Extension (PAE) without having /PAE in the boot.ini. Because of this, your 32 bit guests will work with large ram as the screen captures show. For more information, see http://support.microsoft.com/kb/875352.