Have you ever cleaned your system of resource wasting garbage that builds up over time and registry errors? If not, your system may be needing a good cleaning. Run CCleaner. Do the Clean and Registry both. Defrag. Reboot. http://www.piriform.com/ccleaner
If that alone doesn't fix it, you may need to remove old graphics driver remnants that are conflicting with the new driver. Uninstall the existing Nvidia driver, reboot to Safe Mode and run Driver Sweeper. Have it find and remove any remnants of Nvidia, AMD, and ATI graphics drivers it finds. Reboot and install the latest Nvidia graphics driver. Defrag. http://phyxion.net/item/driver-sweeper.html
Btw, if you put a couple more GB of memory in the system you won't have to wait for XP to suffle virtual memory on and off the HDD as often.