I have a Pentium III 750 Mhtz, I am running DesktopX, Object Dock, Windowblinds, Cursor XP, Rainlender, Sysmetrix, Norton AV, Norton Personal Firewall, and I have no problems. I even have three hard drives running with 160 GB. I agree that this must be a system issue if you have problems.
I can even start up my image editors, and use the internet, and still no problems. But, I defragment my system regularly, I remove all orphans from my registry, I remove unnecessary start up files, I check for adware and viruses regularly, I clean my temp files, I use window washer to clean up unneccessary files, I removed unneccessary window services such a messenger services and I totally removed windows messenger. I've turned off windows automatic update that can install third party drivers that will cripple my system.
Right now, my system CPU is 3.4% usage, it might spike during page loads, and my memory is a little low. I have 384MB and I have 150 available. BUt, I can get my memory back to 230MB by running TweakXP. I even run my DVD player with this setup when I'm not on the interenet. Still, no problems.
I think you may need to fix some of the issues that I have mentioned above.