Steve, there could be a number of reasons for this slow performance, so here are some things to try;
Firstly, do you have a firewall, and any anti-virus and anti-spyware utilities installed and running? If so, which ones? Viruses and spyware will slow down a system, and if you have no protection the likelihood of a malware infection is greater. However, some anti-malware utilities can also be resource hogs, (Norton products seem the obvious culprits), so there could also be a performance hit with some anti-malware utilities checking the applications you are trying to open.
Secondly, from your original question, just check your Virtual Memory settings. Find your My Computer icon, (either on the Desktop or in the Start Menu), right click it and select Properties. Then in the new window goto Advanced, and click on the Settings button under "Performance". In the new window click the Advanced tab, then the "Change" button under Virtual memory.
If there is no paging file set, (the Page File is the same as Virtual memory), or if a Custom Size has been set, try selecting "System managed size" instead, then click the "Set" button.
OK/Apply/Apply/OK. Windows XP does a good job in managing its own virtual memory. With 1GB of actual RAM you should not be having memory problems anyway.
What is your Startup, (boot), time like? If it is slow and ponderous then perhaps you have too many applications set to load at bootup. Once loaded they will reside in RAM waiting for you to call them up. If you have a large number of icons in your System Tray, (also known as the Notification Area where the clock is displayed), then this is an indication of too many startup files. You can look at each application by hovering the mouse over each icon in the System Tray to see what they are, then either double clicking or right clicking and selecting Options, or similar. Remove any options for "Load at Startup". The words may be different but the result is the same. Don't disable any firewall, anti-spyware, or anti-virus.
If that doesn't work, try the System Configuration Utility. Goto Start > Run, type in msconfig and click OK. In the new window click the Startup tab and start checking the entries. Google will be your friend here, but the usual suspects are anything to do with Real Player, or Real Networks, Quicktime, any Instant Messengers. Viruses and spyware will also load entries into here as well. Deselect any you want to disable, then click Apply. You will get an information window saying the changes will take effect the next time you startup. Also, on that next occasion, you will see another window on startup telling you you have chosen selective startup. That window can be suppressed from within the window itself.
XP uses a lot of services and mostly they are required. But some are not and some, like Indexing Service, whilst useful for cataloging every file held on the hard disk, will affect performance during its cataloging stage, which could take weeks or months. There are other services that can either be disabled, or set to manual, (meaning they will only start when you select something specific). Open up your Services console by going to Start > Run, type in services.msc and clicking OK. In the new window select the Extended tab at the bottom.
You can highlight these services to see some details, or double click them to see more information and to change the "Startup type:" from automatic to manual or disable.
The ElderGeek has a good list of Services to guide you;
These are different from Services in that they are the processes currently running in the background. There's no guide as to how many processes any system should have at any time, but as an example, with my Dell Dimension 8300, 3.0Ghz Pentium and 2GB of RAM, running XP Professional, I have 37 processes currently. The Windows Task Manager will show you how many you have, and it is a very good indication of anything "happening" on your system.
To open your Task Manager either right click the Taskbar and select Task Manager, or press the 3 keys CTRL+Alt+Del together just once.
In the new window, (you can always close other windows as you have finished them ), click the Processes tab. Just a couple of things;
a) If you see no tabs or menu items, double click the bar along the top of the window.
b) In the Processes tab make sure you can see the columns CPU and Mem Usage. If you cannot, goto View > Select Columns, and select CPU usage and Memory Usage.
The Performance tab will show you any spiking of the CPU processor and of memory, but it is the Processes tab where you see what is using most CPU and/or memory at any time. For a clearer view, click the CPU column header twice. This will list the entries as most used first.
It's up to you to check these. Google helps or you can try http://www.answersthatwork.com/Tasklist_pages/tasklist.htm
That site will help you identify most of the processes, what they are, and whether they are necessary, optional, or malware.
4] Hard disk.
You haven't said what size your hard disk is, or how full it is. Open your My Computer, highlight the C drive, (if that is your main drive where the OS is installed), and select Properties. That will give you a pie chart of your disk size and usage.
5] Mapped drives.
Do you have a home network running, eg to other computers at home? Some home networks have been set up where the shared drives or folders on other computers are "mapped" to a drive letter in the host computer. This means that, for example, a folder on computer B will show up as a hard drive in My Computer on Computer A.
This is fine, but sometimes, if a network is turned off, then applications like some of the Microsoft Office apps will try to connect to that drive when the application is opened or when the user goes to File > Open in the application. The application keeps trying until it times out, and then it will continue working again.
If you have any mapped drives then this may be a cause of the delay in some of your applications opening.
I hope some of that helps.