The difference between 32-bit and 64-bit systems primarily lies in their data processing capabilities. A 32-bit system can only process 4 GB of RAM or less, while a 64-bit system can handle significantly more, theoretically up to 18 exabytes of RAM. Additionally, 64-bit systems can execute more data per clock cycle and utilize more registers, improving performance for applications requiring large data sets. However, using a 64-bit system often necessitates compatible software and drivers, while 32-bit applications can run on both architectures.