Ausatco,
I am wondering if you are looking at the hibernation file?
During hibernation, all devices are powered off, and the systems physical memory is written to disk in the system hibernation file, \Hiberfil.sys.
You'll need to turn off the "Enable Hibernate" by going to:
Start->Settings->Control Panel->Power Options and then select the "Hibernate" Tab and De-Select the "Enable Hibernation" check box.
After you do this WinXP will delete the hiberfil.sys file next time you re-boot.
Take Care,
Richard
P.S. The more RAM, the smaller I set the Pagefile. The old 1.5x rules were for the days when most systems had very little RAM. If you have a problem, increase the size again.