|With so little physical RAM you need to allow Windows to Control Virtual Memory (page file). If you restrict it, your physical RAM will soon be taken up and your System will bog down.|
Definitely, more RAM is indicated.
Another thing that would help is to disable anything that does not NEED to be running all the time. Use msconfig to uncheck Startup Items. (START>run-type "msconfig" (no quotes)>hit ENTER>Startup Tab.)
There is nothing to learn from someone who already agrees with you.