Thanks for responding.
I don't think it is a hard drive problem since the Mac runs fine when I suspend the vm. I use the XP vm to run Windows specific software that I used on my previous PC, such as Quicken and Microsoft Office suite, and others. I know that some XP programs are not compatible with Win 7 unless I get Win 7 Professional, which is available in both 32 bit and 64 bit.
I received the memory chips for the upgrade and hope to have time in the next few days to install them. Hopefully I'll notice an improvement by doubling my memory. I could then increase the memory allocated to my XP vm from 512k to 1GB, and still have 3 GB for the Mac.
Question--when you suspend the vm, does the full memory you allocated to it then become available to the host?