Solution 1:

Simply put, you do not have enough memory to really run Windows XP well. Your are probably doing a lot of memory swapping to the hard drive, causing you slowness. New service packs, and a lot of (necessary security) updates can often make it worse.

I consider 1GB the minimum to run XP well, and 2GB to run Vista/Windows 7 well. I have had many people, who I know and have helped personally, change their minds about buying a new computer after simply upgrading the RAM (and cleaning the viruses out, in some cases).