What desktop environment do you run, Gnome, KDE, another one?
If you run Gnome or KDE, 128MB is not much memory, you'll probably feel a lot more response if you add another 128MB.
For you Win2K problem, the size of you swap file needs to be increased - but these are memories from a long time ago and I really can't remember where and how.
Edit: iluvatar beat me to it
I guess I should stick to writing my post and don't let other things distract me when I type a reply.