Well, memory is your issue there.
Dependant on what you want to do with the PC, I would double your RAM at least, but upgrading to 1024MB is going to show you a **** of a difference, and the awesome thing is that RAM isn't expensive to buy, if you just go for the middle of the road stuff.
I'd also suggest turning off all the fancy graphics in XP as well so you've got the Windows 2000 look.
I'd also check in MSCONFIG and see what you've got in your start up, as that could be slowing you down.