According to Microsoft's own knowledge base there are several issues with the Indexing Service used in XP to provide the so called "faster searching". I believe there is a good deal of resources used to run the indexing service that reduce performance of XP. Also, the benefit you get from it is questionable at best. So, lets go ahead and turn it off. If you find no noticeable improvement you can always turn it back on.

Double Click My Computer and right click on your root drive. Which is usually Local Disk (C:) now choose Properties. Under the General Tab uncheck the box next to "Allow Indexing Service to index this disk for fast file searching". Click Apply.

In the resulting window make sure to check "Apply changes to C:\ , subfolders and files. Click OK.

While the new attributes are applying you will see the progress dialog box. Now your finished! If you want to change it back just follow the same steps and place a check back in the box to re enable the service.