My install is a dog - quick fix tips?

Hi,

My original Xp install on my Macbook pro is from version 3, when my mac was running tiger. Everything was nice and fast then.

I upgraded to leopard and XP lost the ability to recover from resume - a major pain and it ran like a dog

I upgraded to V4 of Parallels and it still ran like a dog but, but could recover from resume so I plodded on

Now I installed the latest Parallels update and I can no longer recover from resume - need to reset the VM. It also runs like a dog with 500 MB free of memory (I have 2GB but close all Mac apps down)

Any tips on quickest way to a decent user experience - should I zap the VM file and start from scratch? I only use XP for MS Money, Live Messenger and a few fitness apps so any tips for a quick minimal XP config (minimal services) are also appreciated