I have an HP Pavilion with an 8GB hard drive and 64MB of RAM, Pentium II.
I run XP on it and it's smoothe as butter. Granted, I have no programs on it, it's just for internet and testing software before I put it on my main PC.
The one adjustment i had to make was in the control panel > system > advanced, in performance hit the settings button.
You want to choose the Adjust for best performance option. This will change the toolbars from XP's default blue bubbly bars to the kind you get in win 98/2000.
(this tip was given to me by poster named fitzjj when I was having a similar issue several weeks ag)
Associates Degree in IS
Studying for Network+