CS3 is bombing out hours into my CFHD.avi export phase of a 1920x1080 footage (70min long).

Will premiere make use of 8Gb if I have it (currently 4GB). Will this stop these crashes?

Thanks

That is classic CS3 issue, it can handle 32-bit float on short exports for complex projects or long exports from simple projects. Premiere is limited to 2-3GB no matter how much RAM you have. Export in 15-20 minute reels, then add the reels to a new project to export your final. This is something CS4 is supposed to address, yet even CS4 isn't without it memory issues, although it is get better.