Dear me, XP
does run in virtual memory as soon as it loads if using 512MB. Why do you think a system speeds up because of extra memory? It only does that because it no longer has to page out memory as much. With just 512MB you will be using page files I guarantee it, just not as large as if you were using 256. XP can actually run in 128 MB but why would you want to? As you say there are the added things needed now such as antivirus and firewall that will help eat your memory as well. Hopefully as baxslash said, the original poster will give a bit more info.
But all other things aside, more memory will make it a more pleasant experience to code anyway. Plus we don't know HOW many things are running in the background on his system. Hard drive performance is an issue here too, as a slower HDD will result in even slower paging calls.
Of course it could be just a problem with that DB setup for some reason, but I doubt it.
Baxslash, I am not surprised your horse powered laptop was ok really. But it depends on his specs (onboard video using memory or not? for one example) and also what programs are running in the background. If several programs are accessing the page files it will run a fair bit slower. A fresh install of DB would probably be a good idea if he hasn't already tried that. Making sure to back up the project first of course.
The easiest way to know you are hitting the virtual memory limit is how long the system takes to recover from memory hungry apps. If you run a game and quit, and it seems to take as long or longer to actually exit, than it does to load up, then your memory is being freed from the page file system.
For instance on my main rig if I play LOTR and exit it is instant. However on my 1024mb based machine it takes forever, and you do not want to attempt alt tab!
There are lots of programs out there that add to your startup and run in the background. Some people are aware of them some aren't. They are normally the cause of most problems people can get on the PC. I remember one fellow bringing his computer in several times with some weird quirk he said he was getting, in the end it turned out it was a stupid program included with his genius mouse, that had a pair of eyes following it's movement on screen. I had never seen it because I always avoided loading useless programs on systems, and a program for a mouse that works already by simply plugging it in, seems a waste of time to me.
The 512mb memory is probably not the sole reason for this, but that in combination with other things such as AV real time scanning and other programs running in the background probably are. It certainly sounds like the PC suddenly can't cope anymore for some reason, going from the original description. It may even be an idea to actually check how much memory is free on a new project, and how much is free on the offending one.
Unfortunately, PC fault diagnosis can't really be done very well via forums. We can only really give possible suggestions.
http://s6.bitefight.org/c.php?uid=103081