Mac OS X 10.3, aka Panther, will not be a 64-bit operating system, despite running on a 64-bit processor, the PowerPC 970 aka the G5. Instead, the next major release of the Mac operating system will be a hybrid, much like version 10.2.7, codenamed 'Smeagol', which Apple has running on its pre-production Power Mac G5 machines and with which it will almost certainly ship production units.
Smeagol is a 32-bit operating system, though certain libraries and other elements have been recoded to allow applications - and the OS itself - to make use of the 64-bit addressing and datapaths, sources close to Apple said. For example, that's how the Power Mac G5 is able to support at least 8GB of memory, double the 32-bit limit of 4GB. Panther will adopt the same approach.
The PowerPC architecture was always defined as a 64-bit environment - 32-bit operation was defined as a sub-set of that environment. According to IBM, the PowerPC ISA contains an "optional" 64-bit bridge to "facilitate the migration of operating systems from 32-bit processor designs to 64-bit processors" and to "reduce the amount of software change" necessitated by that migration. "This bridge allows 64-bit implementations to retain certain aspects of the 32-bit architecture that otherwise are not supported, and in some cases not permitted, by the 64-bit architecture," says IBM PowerPC documentation seen by The Register. It's this bridge that enables the 970 to offer native 32-bit support and in turn saves Apple and its developers from having to rebuild their apps.
News source: The Register