I don't think the 128MB of RAM is the problem because I run WindowsXP on a machine with 128MB RAM and haven't had any problems. As far as I know, XP is just a bulkier Windows2000, so if it works on the bulkier, it should also work on the less bulky
*Edit* could be a slightly bad BIOS flash, too. See if you can boot *ANY* OS on that PC. (Okay, so I'm betting you can boot DOS----try something like Win98 or Win95 or WinME or some Linux distro.)