This is not the ideal platform for running XP. A USB memory key is not a substitute for system RAM, and your hard drive will wind up very confining for XP.

You can (and should) go up to 512M for XP on this system. You'll need two LOW DENSITY PC100 soDIMMs:

http://www.crucial.com/store/listparts.asp?Mfr%2BProductline=Dell%2BLatitude&mfr=Dell&tabid=CR&model=Latitude+CPx+Series&submit=Go

Given the cost of these ($210+), plus the cost of a hard drive (say a 40G for about $70), plus the cost of XP ($100+), you're in for an expensive round of upgrades and the result will be far from a barn-burner of a system performance wise.

Would I be better off to run Windows 2000, or 98ME without upgrading?  Would I have enough ram and memory to run these with what I have?

Thanks so much for responding.

64M will run DOS (95/98/ME) acceptably, but not 2000 or XP.