You should be able to buy one copy of Windows XP and use it on all your home computers with their license agreement (I think).
Not legally - I mean I think it will work as long as I don't try to call MicroSoft and get a new activation code for it too often, which XP sometimes requires. Here's what I see the options for using XP are -
BTW, I have an HP laptop running XP Home that came with a full install disk with key, but I am using it on the laptop.
I think I can install that version of XP on the desktop with the same key and get an activation code, but I am not sure what would happen if the computer were put on-line.
A search on price-watch shows 9 Software selling an installation CD (basically a different key) for $10, which I think I could use with the HP CD, I already have. EDIT - Apparently this is not a software key. Microsoft apparently cracked down on vendors selling software keys without licenses. So this one isn't an option.
Glob2000 is selling the same type of (HP-even) full version CD that I already have for $60, which would probably be legal.
Upgrade versions (from 98) go for $70 to $80.
Or NewEgg has a full retail OEM version (no tech support, no biggie) for $91.
I am entitled to the upgrade version, but I'm using that with 98SE (98 and then the SE upgrade) and for $10, I would rather get a full install. (I don't want to have to load 98 on the machine and then XP if I wanted to start over).
Also, I would prefer to stay with FAT32 rather than NTFS as this can be read by KNOPPIX and doesn't require a HD backup and reformat.
Thoughts?
Best Buy has 256 PC2700 PNY Technology brand for 19.99 right now too 
I didn't see that, but memory is cheap on pricewatch. . .
Another idea I had was that USB is basically sharing 1 or 2 IRQ Channels with multiple devices and maybe Windows isn't doing too good of a job at managing them. Try unplugging all USB connections but the thumb drive and see if there is any difference. (Well, I guess you need your mouse too.)
I disconnected the scanner - it was slightly more stable but still locked up. . .
I also removed all the USB components in device manager and let Windows re-load them - no improvement.
On the video card you could try going into the bios settings when you boot your computer and making sure the Primary Display adaptor is AGP.
I'll check that . . .
At this point, I can change the motherboard, but that's a hassle (free though) and may not fix the problem. Or I can look into putting XP on the machine, but that's somewhat expensive and might not help if it's a hardware problem.
Thoughts?