Your problem is quite simple. The problem is Windows Me. Seriously. I'm not being anti-Windows version X here. I found here at work that WinMe is a resource hungry OS. So much so that when I queried it with a Dell engineer once, he told me that they had had so many problems with it, that they quietly withdrew the policy of pre-installing it with new systems.
No amount of tweaking can help this puppy. Go back to Win98 or proceed to Win2000 or XP. Collect £200.