Ubuntu can read and write to NTFS by default. So why does everyone think you have to go with FAT32? Plus the limit of FAT32 isnt 4GB it is 2GB. As long as you put the torrents or whatever you download ontot the NTFS partition you will be fine. It will be able to be read/wrote to from both XP/Linux just fine. I do this all the time. I download from torrents to a NTFS drive from within Ubuntu and Sure enough when i reboot they are still there in XP.
With 2GB of RAM you really dont need Swap. I have 3GB and no swap.