I take it you've also updated to SP3 or similar. Doing so and being updated, that on a 1gb of ram maybe having too much internal house cleaning tasks that hoard ram during their operation. I have found XP with 1gb to be not enough and adding more ram is about the only cure, excluding any s/w issues. The other poster offered to "re-paste the CPU" it maybe time if for anything else, you did it.
If your PC is lagging, allow it some time. Maybe, after few mins. it improves, then there are tasks being done not immediately apparent that due to the rush of initial start do get done. If it does improve then add ram that is allowable for possible fix, again that depends on your mtrbd. based chipset, maybe 2gb or better.
Sadly, XP has seen better days, time to move on. If you do everything possible, maybe even swap out the cpu itself to possible 3.0 or at least 2.4 or better if supported by bios and chipset as the last gasp before tossing PC. I've seen too many XP based, super-tuned for best performance and still lag, so take that IMHO mode.
tada -----Willy 