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I have a server running Windows 2003 Enterprise (x86) and SQL Server 2005 Enterprise SP.

The sqlserver process currently consumes aorund 1.6GB of memory although there is around 12GB in the sever (the OS only see's 4GB due to 32 bit limitation). To use all this memory will I need to upgrade to a 64bit OS and 64bit SQL Server enterprise?

I have aslo read about using AWE but would like do it do it without that if possible.

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32-bit x86 without AWE can only use 4GB of memory. You have to either upgrade to 64-bit or enable AWE to be able to utilize all memory.

Anders Abel
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Without AWE SQL Server is limited to slighly under 2GB of RAM (3GB if you boot with this setting). Using the extra memory requires that you either use AWE or a 64-bit install.