I'm glad that disabling Superfetch helped, although you don't have that option in XP.
For anyone who comes across this at a later time, I'll say this about Superfetch: Most of the time, Superfetch will improve your system's performance, particularly at application launch times. However, if your computer has a lot of programs on it and/or your system doesn't have a lot of RAM, the Superfetcher can become too aggressive at prefetching files from the disk, causing lots of disk access which means that programs that really need to access the disk at that time are slowed down because the HDD is busy. Also, the higher "free memory" reading in Task Manager is not necessarily "good" because that memory is now unused. With Superfectch enabled, that Windows would simply read certain already cached files from RAM, instead of the slow HDD. The memory used by Superfetch would be immediately released if another program needed more RAM, although its use could cause excessive paging.
I believe that the reason disabling the Superfetcher helped in the OP's case is because of the excessive paging and prefetching that it was causing in his system. Disabling the Superfetcher will only improve performance in some cases, so don't make a religion of "disabling Superfetch will speed up your computer" (I mention this because I've come across it on the Internet).