Have you a TV card or something Windows MPlayer 12 can be offset with this as they take control of videos and this slows media player and somtimes crashes it if you attempt to play video (dvd) above about 3000kbs/sec.
More memory would be a good investment (On a 32 bit OS only 3.4 gb of memory is recognised approximately), you should use the same brand and latency for best results - BUT you will probably have problems getting memory for it now as that system your running is pretty old. I was running Windows 7 ultimate on a laptop with 1024mb of memory but it didnt run too bad, but i found the cpu usage higher - seems to be aero was causing the problem as I returned to xp after a while and the cpu usage was down with media player for example. Your onboard graphics probably has the minimum amount of memory required for aero also. You can disable a lot of features if your not using them in Programs and Features - on the left side Turn Windows features on or off- eg IE8, Media Player, Media Centre, tablet pc, etc. You could also switch off services - download a guide - google or bing for it.
Try turning off aero and UAC might help also, but do so at your own risk with UAC - if you visit unsafe sites its best to leave it on. You could switch to Microsoft security essentials also, as it has less effect on performance than most antivirus malware programs. http://www.microsoft.com/security_essentials/