personally, i'd want to put more ram in the machine.
from
http://www.pcserv.net/tc_windows-xp-upgrade.html
Tasks To Do Before The Upgrade
First, and foremost, you have to compare the specs of each PC to Microsoft's recommended specs for a PC that is capable of running Windows XP. (Note: Microsoft lists recommended and minimum specs. We recommend using the recommended specs as the minimum feasible specs for a Windows XP PC.) Here are the Microsoft recommended specs for a Windows XP PC:
PC with 300 Mhz clock speed or higher. This means that the PC needs at least an Intel Pentium or Celeron, or an AMD K6, Athlon or Duron with a speed of 300 Mhz or more.
128 megabytes (MB) of RAM
1.5 gigabytes (GB) of available hard disk space
Super VGA (800 x 600 resolution) or higher video card and monitor
CD Drive
Keyboard and mouse
If you have a PC that doesn't meet these specs in one or more areas, then it is not a candidate for upgrading to Windows XP - unless you can first upgrade its hardware to meet the specs.