Not sure if this is still applies in XP, but Windows has a System Information utility as well: Start->Programs->Accessories->System Tools->System Information.
You may find that it's a certain piece of software that is reserving great chunks of memory for itself and not releasing them, as suggested above.
I had a similar problem with very slow operation at times and then crashes with "No memory." I finally traced it to a little utility I was using (RAM audio to WAV file converter) that was hogging every scrap of RAM it could find and not relinquishing it upon termination.
