Release, SP1, SP2, SP3?
-Update to SP3.

RAM?
-Get at least 1GB of RAM.

Pagefile size?  Set size or lower and upper limits?
-Set your pagefile to a constant size, 1GB is good, you don't want the system using it unless it has to (RAM is superior), and you really don't want it paging out say 8GB of stuff to the hard drive.

CPU?
-More information necessary for recommendation.

Process using 100% CPU (or >50%)?
-If it's a Windows system process, you have either a ghost in the machine (virus, spyware, etc) or a marginally corrupt install.  Reinstalling would be a good idea, but you should be able to do a repair install.  What SP is your install disc?
-If it's some other process, kill it, Google it, check the settings for it.  If it's something you need, lower the priority on it in task manager by right clicking on the process.  You can save the priority by downloading a handy little task manager extension called Prio.

You don't need Windows Update to get SP3-assuming of course you're allowed to, that would be a good idea.

It's probably due to running too many applications at once with the low RAM, though-512MB just doesn't cut it these days, and the time period you took the info at shows only 87MB free, at which point in time I presume you aren't doing much anyway.

When Windows runs out of room for active processes in RAM, it starts paging out programs to the hard drive, which is about 50-100 times as slow as RAM.  This is why the system is slowing down.  As for the CPU usage...that's just an unintelligent design on the part of Windows; to my knowledge, there's no reason for it to use that much, particularly as it can only page in/out as fast as the hard drive can read/write.

But I've seen that kind of a slowdown and CPU usage issue before, actually constantly, on my dad's system, which runs XP with a mere 256MB of RAM (of which 32 is "borrowed" aka stolen for the integrated video), as well as previously on the system I was using prior to this one, a 900MHZ Athlon Thunderbird with a miniscule 128MB of RAM.

The fact that it's a relatively weak Prescott core Celeron D (and socket 478 to boot) probably doesn't help any.

If you're not allowed to install more RAM in it (DDR333/400, about $65 on Newegg for 2x1GB), then all you can really do is limit how much you have running at once.  Aside from that, though, lowering your pagefile size to 512MB or 1GB, and ensuring that it is a constant size rather than a changing size, would be a good idea.  You won't be able to run as much, but on the bright side, Windows won't be able to page as much of it out, either.  (Note: You're probably not reaching the limit at your current pagefile size anyway.  You'd be looking at greater than an hour for a process to respond if you were.  Trust me.  I've been there.)

One other thing: I see you've got integrated UniChrome Pro 3D graphics on that motherboard, which states a maximum "memory share" of 64MB.  If the BIOS settings aren't locked out, you can change this down to either 16MB (depending on the board) or 32MB, which would give you a little bit more breathing room.

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Again, though, when this happens, what process is using 100% (or >50%) of the CPU?

Screenshot, if you don't mind.

Don't forget to enable the checkbox to show applications for all users as well, just in case.

If the CPU's at 100% load, the CPU's going to heat up and the fan is going to speed up-assuming of course it isn't set to maximum regardless, which rather unfortunately many are not.

Hit your printscreen button (actually ctrl+prtscrn to just get that window) with task manager active when the CPU usage is >50% (preferably sorted by CPU, but not necessary as long as you don't have 50+ processes running) and paste it into Paint, save as bmp.  Upload to ImageShack and it'll convert it into a jpeg for you.  The link code doesn't work properly here, as it's not clickable, but if you click on the image itself once or twice it'll show the direct link in the address bar and you can just paste that in.  It'll be something like http://img232.imageshack.us/img232/1373/wtfdisplayll7.jpg, or in other words http://imgnumber.imageshack.us/imgnumber/another number/original filename + letters and numbers appended to end.

looks to me like this is a large part of the problem. Xp minimum is 256MB, needs 512 to run half @ssed, won't get optimal performance without 1-2G depending on how much software is installed.

is that available RAM always that low or only when in 'slow mode' in any case you don't have much room. looks to me like they have too much software installed for 512 of RAM and the majority of your RAM is being used for system resourses and background processes. leaving you little RAM for the actual app when in use.

A lot of software still runs background process even when your not using the app. for example I have a LOT of crap installed on my system, I have 42 processes running but yet the only app I am currently using is Firefox browser. I have 2G of RAM installed and am using 750MB yet firefox is only using about 90MB. Meaning I have 650MB+ in sys resourses and background processes running.

being it's a work computer, how long has it been since IT defraged or cleaned up the registry? how much free space is on the HDD? systems also slow down when there is little free space on the HDD.

the way I see it since it's a work computer is you have 2 choices, deal with it or ask IT to add some RAM and optimize the system.

as well for posting screen shots here I find it easier to paste the HTML code from imageshack. when you host the image and it is up in image shack, double click the image and it will open another page with the screenshot on the right and a list of codes on the left. copy the HTML code, open a post/reply on this site, type your message, hit the HTML button to the right of the smiley face, paste code. this will post the actual screenshot in your post rather than a link.

Actually XP minimum is 64MB.  It won't install with less, but if you install and then remove, you can get it to "run" (and I use that term loosely) with 32MB.

But your point is still valid; XP is horrendously slow with 256MB or less, due to the above mentioned points where everything under the sun gets paged out-while still in use.

It's good that it's working well now, but I'm going to agree with blackcurtain on my recommendation-get IT to add some RAM.  It's ridiculously cheap these days.  It's worth noting that I didn't say to get IT to do it, but, what can I say, I am my IT, so I don't have to deal with that particular complexity.