FT3 should be able to create a binary world from an MDR up to a little under 1GB in size (that's the limit on the memory mapped files for a 32-bit program). If you're using Burn into Surface, then you will indeed be decimating the data down to the limit of FT (usually around 4k samples wide or so). If you're just leaving the MDR on disk and linking to it, FT will keep the full resolution of the original. For example people regularly use FT with the TOPO1 data set without problem ( ProFantasy Community Forum - Fractal Terrains 3 header format with ETOPO1 shows how); ETOPO1 is 21800x10600 samples.

I don't think that the retail version of FT is marked to use more than 2GB of RAM. If you're running a 64-bit OS and want FT to use more than 2GB of memory allowed by a basic 32-bit program, you should be able to set the /LARGEADDRESSAWARE flag on the retail version of FT to get access to more workspace memory (see GIS Geek: Set 32bit Executable LARGEADDRESSAWARE Flag to True or Guide Enable Large Address Aware (for 64-bit systems with >3GBs of RAM) - PSO-World.com Forums for examples of how to set the flag on an existing executable). This change should make it less likely that FT will crash due to out-of-memory conditions.