Egad, XP on a 500 mhz! Ditch it, ditch it, ditch it.
For a 500 mhz PC use this setup.
DOS if you can get your sound driver working (only driver you will need). I am almost ALWAYS able to get the sound driver working. Especially easy on name brand PCs.
You SHOULD really try to go DOS on a rotated monitor because there is NO ADVANTAGE to having windows on a rotated cab, and several disadvantages (like the fact that none of the frontends that rotate can shut down windows).
If you want windows then.
64 MB of ram or below = Windows 95 OSR2
96 MB of ram and above = Windows 98 second edition.
Gamelauncher is a great frontend to use, be sure your monitor is rotated the CORRECT way. Correct way looking at monitor from the front is to have your monitor chassis on the left.
Be sure to download the gamelauncher setup tools, as the included setup app has failed to work on every single computer I tried it on, but the gamelauncher setup tools work on everything.