Well as your PC scrapes through on medium-low to minimum spec for MxO I'd expect that you'd get some lag but not crashing out all the time.
More than likely it's due to other programs running in the background. File sharing programs that use CPU time and bandwidth are the worst offenders.
Also you will need to close as many programs as possible as you only have 512MB RAM, 256MB of which is used by Windows XP leaving 256MB for MxO (approximations).
The top 4 things to do to speed things up: