This probably isn't relevant or helpful and maybe I'm not even qualified to comment but:
*I probably wouldn't have bothered to install Windows XP on a machine with anything less than a 512MB RAM and a 1.5+ GHz processor.
---For a machine similar to yours with <= 256 MB RAM I probably would stayed with Windows 98.
*Using an old machine with 500Mhz processor, 256MB RAM, ATI Rage 128 (16MB?), Windows 98 and 3DGS version 6.31.4, with
---100 testDummies (254triangles a piece?) in a fairly small level, and more than 15 in view at a time, I get > 30 frames per second.
Maybe you are using 'software mode', the OS is eating up too many resources, and/or 3DGS version 5.24 is much slower than 3DGS version 6.31.4.