Your computer is adequate but you are asking alot of it.
Two gbs of RAM is adequate and, in fact, adding more in XP will dent your
pocketbook more than improve performance.
NX, PS and CS3 hog both memory (RAM, swap file/scratch disk) and system
resources (the bits any OS uses to keep track of what it is doing, which are
finite). 10mp images quickly swell to 50mbs or more depending on how many
layers and filters you are using.
You are on the right track about shutting down un-necessary background
programs and processes: that is the main software configuration change you
can make that will yield a tangible improvement. Virus programs and
firewalls should not be a problem but might be.
If you do not have at least two physically separate hard drives plugged into
the motherboard then get a second and configure properly for use as a
Windows Swap/photoshop scratch file. There are many source of info about
this, including Adobe.
If you want to upgrade the tasks you are trying to do call out for a dual
core processor. Although each core may be slower than your PIV the OS can
assign programs to alternate processors and some CS3 processes, but not the
whole program, are multithreaded. Even with a dual core processor you still
need at least two hard drives. The same RAM limits apply: XP really cannot
use more than 2gbs effectively.
Whatever you do, do not get Vista (or any 64 bit OS). Although MS claims
32bit Vista can use 4gbs of RAM Vista is slower, buggy and there is a claim
out there that every time Vista gives you the screen blankout, which it does
every time you move a file or do some other innocuous chore, Vista unloads
the monitor calibration data. Easy to reinstall but what a pain.