There's no doubt that a system that's seven years out of date will give problems. SP3 and the subsequent 130+ updates is a crucial addition to an XP installation and if you want to carry on using XP after its End of Service date next April, you will need to update it.
You should also run Checkdisk to find and fix any hard disk errors. Use the command line syntax chkdsk /r to find and fix any bad sectors or clusters.
I'll move this to the XP sub-Forum where you might get other suggestions.