A bit of background might help, i recently (last week) did a complete OS reinstall because as you noticed, the computer is fairly old, and had run enough different programs over the years that registry was beyond repair and the hard drive clogged with unnecessary data which was tied to programs long uninstalled. Any how, it was running pretty slowly i was also facing fairly regular BSOD issues. So, i completely wiped my hard drive, reinstalled Windows XP, updated the BIOS, installed drivers
, and updated windows XP SP2 to SP3. Then i installed chrome, AVG 2012, and for a short time Windows Live Mail. Everything was running very snappily and i was having no issues. I then installed my RAM from the (1x512MB)+(1x256MB) DDR-333 set up to the (2x512MB) DDR-400 set up, then, wanting to run some programs which requested minimum 1GB RAM and more multi-tasking capability, went to the (2x1GB) DDR-333 set up. This final set up was even better and i was very impressed with the way the old beast was operating. Then, the strange memory situation occurred. I have now checked for malware, viruses etc, uninstalled Windows live essential, uninstalled AVG 2012 and run both CPU-Z and PC Wizard 2012 for some more system/memory specs and have linked them here.
I understand that the OS should be using as much memory as is available to make it run as quickly and smoothly as possible, but that is not the case as the computer is running terribly slowly, and struggles to open a single tab in Chrome, the user-interface of AVG(when it was installed) and took nearly 20 seconds to copy the screenshot I took into Paint to save it as .jpg.
I am still perplexed as to the issue and am considering just re-re-installing windows xp as i wont lose much data or be too much hassle as hope that the issue doesn't recur.