Some research led me to find this Google Groups discussion
about the problem and this Microsoft Technet article
discussing the solution (look at the bottom of the page).
Apparently you need to tell Windows that you want to use the machine as a file server and that it should allocate resources accordingly.
Set the following registry key to ‘1′: HKLM\SYSTEM\CurrentControlSet\Control\Session Manager\Memory
and set the following registry key to ‘3′: HKLM\SYSTEM\CurrentControlSet\Services\LanmanServer\Parameters\Size
After making these changes and restarting, I haven’t seen this issue arise again. Fixed!
Thanks for reporting in with this fix krivel, it looks like to share resources with XP these two registry keys need to be adjusted.