When the operating systems get low on memory you will get it thrashing the disk as it desperately swap memory blocks onto the disk to try and load the memory block it now needs -- this would result in the formerly flashing LED (must be disk usage) being on constantly. Loading a program will be slow as well as the OS tries to clear enough physical memory to run it.

512MB is low for XP these days as it and programs have got more memory hungry.

If you were close to the limit already it can be something very minor which pushes the OS over and you have your system thrashing.

It isn't worth trying to track down what pushed you over the limit, memory is very inexpensive, find out the type of memory in your computer and buy 1GB or 2GB depending what your computer will support.

Simon