Your main problem is lack of RAM. X-windows uses a lot of ram, and so does Firefox, OpenOffice, Azureus, and just about any other major X program. I highly recommend having at least 256 or 512mb of ram. Your CPU speed, on the other hand, is more than enough.
Additionally, which windowing environment are you using? KDE and Gnome are really big whores in terms of the amount of CPU/RAM they use. If you are using KDE or Gnome, I suggest trying out Xfce. It's also pretty and has nice features, but it is also light-weight.
Hope that helps.