WordPress memory on 3.X-Collection of common programming errors

I’m using the WP_Overview plugin to view WordPress’ memory limit.

It’s showing Mem: WP 32M (def) Usage 25% 32.59M of PHP Limit 128M.

However, in my functions.php, I have the following line of code: define('WP_MEMORY_LIMIT','96M');.

I’ve also installed the Change Memory Limit plugin and tried updating the figure from there, again to 96M.

Despite this, the Overview plugin is still showing 32M.

Three questions in one:

1. Which gets used, the PHP limit or the WP limit?
2. Is this plugin a good way of checking the limit, or should I try a different method?
3. Is this potentially a problem with WP 3.X? I found this post on WP Support which might imply that it is. Their solution suggests moving the PHP.INI but I’m not particularly keen on doing that – surely it can’t be safe?

Thanks in advance,