Does this mean one of my RAM sticks is borked or is it a [yet again shitty] Windows quirk?
The RAM issue is most likely something that all 32bit OS’s will suffer from where they can only address 4Gb in total, Quick guess that the laptop has 1Gb on a Graphics card so it can only use 3 of the main RAM.
Is the chipset 64bit? If it is installing Win 7 64 will fix that issue, if not then you are at your limit.
Who makes the laptop? Sounds like you need a driver for the Webcam running under Win 7. Normally go to the manufacturers site and find the support/dl page enter your laptop model etc. and get the right drivers – normally an entire set for a laptop running under win 7.