PsiFox is correct. Even with an upgrade to RAM you are still running below the recommended minimum of 256Mb.
Can you move down from XP? If you are only using it for word, etc. than the spec should be OK on Win 95 - although, personally, I believe that even then it has a limited shelf life as your daughter's needs grow ...
"64 MB minimum supported; may limit performance and some features"
This indicates that your system is at the extreme bottom edge of the specification envelope and as all your running software such as anti virus will also want its chunk of RAM, explains why your system is so slow. More memory would help, but with your systems age unless you can pick some up off e-bay it's likely to be ridiculously expensive. You'd probably be better off removing XP and going back whatever you had before, be it W98 or something else less resource hungry.
If your budget will stretch to it, if you go to somewhere like ebuyer click here, you can pick up a half decent system unit with Windows, speakers, keyboard and mouse (i.e. all but the monitor - you can use the one that you've got), for around £250 all-in. This would be a much much better solution.
Also, people like Dell sometimes have complete systems (including screen) for under £300 all-in.