Off-hand, I can't particularly see anything wrong with your set up. But I would recommend updating your Java to the latest 1.5 version (update 6): Java 1.5 (take the JRE) & get the "Offline" version installer.

I do know that some LW versions run well some some people's systems & the next version doesn't. This seems to often been the case over the past couple of years at least.

If LW 4.10.5 isn't working well, then try 4.10.7 or beta to see if there's any improvement.

As a side comment about your set up, 392 MB ram is not a lot. It might be worth seeing if you can pick up some cheap ram at the local market or something. Particularly since 133 ram has been outdated for a little while now. The price should be on the cheaper side now. See what bargains you can get.

Since you're using more than one HDD for p2p, it'd be well worth doing a frequent check for fragmentation & defragging them if they start to get bad. On win 2k this can make a big difference to performance.