512MB would be a minimum I would recommend to run XP decently.
If you have your XP disk (not a restore disk) I would recommend performing a repair install. A repair install doesn't erase anything but it does re-install Windows files which will correct any corruption you may have picked up. If you don't have a XP disk see if anyone around you has one you can borrow (Home if you have Home, Pro if you have Pro).
Repair Windows XP - How to Perform a Repair Installation of Windows XP - Part 1 of 2