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You really haven't provided enough information to give an answer, so I'll guess.

Are you running Windows in a VM, like VMWare Fusion? The VM cannot utilize all your Mac's memory since enough memory has to be allocated to the Mac OS to run. In Fusion, you can set how much memory is used by Windows. Ditto for Parallels. But if you give it too much then memory swapping to disk will occur and everything will get very slow.
 
I used bootcamp 3.1 to install Windows XP. If information is not enough, please let me know what kind of information should I provide.
 
I used bootcamp 3.1 to install Windows XP. If information is not enough, please let me know what kind of information should I provide.

Windows XP is a 32-bit OS that requires a BIOS change to use 4GB of memory on a PC. I'm not familiar as to how this is done on a Mac, but this may be your issue.
 
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