If you install XP at all, you are doing yourself more harm than good if you DON'T install SP2. The security features and benefits you will be getting outweigh any potential performance decreases. If you want to run XP on this system, I would suggest getting more RAM. If you have 256MB, you will see a huge difference by upgrading to 512MB.
ahh..sorry for splitting hairs...you can see where i got my figure from...I was quoting recommended (128meg ram and 300mHz)..not bare minimum (which is 64 meg ram and 233mHz) ...!! Not that it makes much difference.
Here's What You Need to Use Windows XP Professional
•PC with 300 megahertz or higher processor clock speed recommended; 233 MHz minimum required (single or dual processor system);* Intel Pentium/Celeron family, or AMD K6/Athlon/Duron family, or compatible processor recommended
•128 megabytes (MB) of RAM or higher recommended (64 MB minimum supported; may limit performance and some features)