Thanks a lot for the link kbp.
I decided to erase my XP VM and install Win 7 Ult 64 bit.
I loaded the Viostor and Balloon drivers and changed the disk bus to Virtio and now my VM feels a lot more responsive.
My resolution was stuck at very low settings, 1024 X 768, though. I tried installing the windows spice-space drivers from spice-space.org, but Windows 7 is saying there is an error with the QXL video driver. Did get sound working though.
So, does anyone know where I can get working spice drivers for WIndows 7 64 bit. The .exe on spice-space does not seem to work. Thanks.