Yes, you can have too much RAM.
WILL YOU ALL PLEASE READ THE FAQ:
FAQ: What is the maximum amount of RAM for Windows?.
All 32-bit Windows versions (apart from Win2K AS and DC) can
ADDRESS up to 4GB of RAM.
Win2K Advanced Server supports up to 8GB of RAM and Win2K DataCenter can support up to 64GB of RAM.
Windows 95, Windows 98, 98SE and Millennium Edition can only physically
ACCESS a
maximum of 2GB of RAM.
Win9x/ME can go up to 512MB of RAM before it requires an adjustment to the vcache to use more RAM.
For more information regarding the 512MB limit and the workaround, see
this article.
Then you have hardware limitations.
Most of the Pentium chipsets, 430VX, 430TX for example, can only cache up to 64MB of RAM. That means for those systems, you may have poor performance with more than 64MB of RAM.
Similarly the Klamath Pentium II (233, 266, 300) can only cache up to 512MB of RAM. Any more and you lose performance.
Chipsets can also limit you: the 440EX and 440LX chipset can only have a maximum of 256MB of RAM.
The i810, i810E, i810E2, i815(E/P/B/G) chipsets all have a maximum of 512MB of RAM.