Your spec should run windows xp ok, with a light load.
The page file used figure - 304MB - is that immediately after booting? If so, you've still got some hogs in there (shouldn't be more than 200, and really less) If you run Norton or McAfee AV/Security Centre, consider ditching it and using something like free AVG. Have you run anti-spyware scans - spyware most common cause of slow machines. If you haven't, I'd run several scans (with one or more of spybot, adaware, windows defender, avg anti-spyware).
You also haven't given comparative info - like how slow it is compared to when it was running what you consider reasonably. and when slowness started (and any hardware/software changes around the same time).
PS. A RAM upgrade is always a good idea - adding another 256 or 512 would make a difference - but you should get to root of current problem too.