I can safely say that 3 GB is NOT enough memory. I'm running 4 GB (two of which is dedicated Radeon HD 3200 video memory) and a 2.1 Turion and I'm having similar problems, but Dynarec works on mine. Of course, I'm on Vista. I'd imagine the requirements are half of Vista's for XP, so you should be fine with 2 GB. What's your GPU? Is it an integrated one, or Expansion Card type? If it's an expansion card, it should be above a Radeon 700 or GeForce 6 series (though I'd recommend, as always, a Radeon HD above 2K series)
EDIT: Heh. I just noticed you fixed it already
EDIT: Heh. I just noticed you fixed it already
Desktop (work in progress): Pentium 4HTT 3.06GHz, GeForce4MX420, no sound card (yet...see what I mean about work in progress?) XP X86 SP3 modified
Laptop: Turion X2 64 2.1 GHz, Radeon HD3200 GPU, 4GB DDR2-800, Vista Premium X64 SP2
Laptop: Turion X2 64 2.1 GHz, Radeon HD3200 GPU, 4GB DDR2-800, Vista Premium X64 SP2