XP Home runs fine here with 256MB RAM + 18MB Video - no acceleration. When XP came out that was a lot of RAM. Min RAM for XP is 64MB. MS recommend 128 MB. It definitely shouldn't need 1GB unless you want to do something high-end and memory-intensive.
If it's running slow something else is wrong.
Original XP> 128MB RAM
XP SP1a> 256MB
XP SP2> 512MB
XP SP3> 1GB RAM..... a raw XP install will run on limited RAM but once antivirus etc is added the above values usually apply in my experience.
Vista or Win7> 2GB+ RAM...
....any Windows OS + virus/spyware and any amount of RAM won't guarantee speed!!
Sounds like far too lttle ram to me. I think one of your earlier posts indicated that you had 2GB. Try allocating 1GB to the vm and see how it goes. Win XP does not like small amounts of ram period.
Windows seems to grab all available RAM allocated to vm....
....a very greedy OS!