The 32m part controls the color of the username. (\u). 1 is red, 2 is green (as seen in the user and host part, \u@\h), 3 (as seen for the directory, \w) is blue.
You can use this to distinguish different hosts by color.
Shell colors change the game really. I did this at work; when I'm on the admin server my prompt is rainbow, other servers black (I use a solarized light terminal). It has saved me so many times.