Most likely. It won't run great but Win95 oughta run worse. WindowsXP uses modern day MM algorithms which make it manage memory more efficiently. I havn't done the testing myself, this is purely theory but I'll put my money on it.
That's fantastic and all, but you're forgetting one issue: Windows 95 uses a TON less memory and CPU than XP. I assure you that on my 500mhz family computer, Windows 95 ran a whole lot better than XP does. It was faster to load and more responsive.
I see absolutely no way that a modern graphical heavy-weight OS could possibly beat an ancient graphical heavy-weight OS. Windows XP wasn't designed to run on old hardware, and Windows 95 was (well, it wasn't old at the time.. you know what I mean!)
Incidentally, I assure you that Slackware 10.2 runs much better than Windows 95. I don't have any measures, it's just how it is. I wouldn't mind installing Windows XP on it just to prove you wrong, but it's really not worth my time.
You CAN turn the "Modern Day Graphics" off, when it boils down to it it uses the same space of memory. Consider this.
A window of memory for 0xhere to 0xthere weather it contains zero's or one's or actual information, it's going to take up the same amount. So unless you have all of the XP Eyecandy on (Cleartype, Menu Shadowing, Fancy menu scrolling, etc..) it should be the same (if not very close) to Win95 in terms of how lightweight the UI is. For added startup speeds you can also turn on the old style logins. XP has a considerable edge over Win9x in startup speeds simply because it's been reworked.
Only time I can see Win95 beating XP is in Kernel communication because it's local since everything runs at ring0 (I may be wrong, even so it would have been dumb of them to make Kernel Memory RW and be in ring3..defeats the purpose..except to stop people from issuing things like cli, sti, and hlt) Even with that, iirc XP uses callgates (Correct me if I'm wrong) which add some speed over the flat interrupt based communication model Linux uses so in intensive communication operations XP should win out.
I'm not denying Linux will undoubtedly win, it was written with old hardware in mind. For XP to be as modern as it is, and for windows as a whole however I think it's good that they can even compete.