Ok, scrap everything you've heard thus far. Start over.
Download this program: http://www.cpuid.com/downloads/cpu-z/1.56-32bits-en.zip
Double click the icon it downloads, it should ask if you want to unzip it. Say Yes. Whatever location it picks is fine, though if you're comfortable, put it somewhere you can find it.
Open the program inside (it'll be an "application" under type) called "cpuz.exe" (or simply "cpuz")
Click on the tab that says "memory". What does the box say for "Type" ?
Next click on the SPD tab. Click the drop down on the left for "Slot #1, Slot #2, etc" until you get results if none show up.
From where, what does the "Max Bandwidth" box say? It should say something like PC2-800 and then a speed in parenthesis (667 MHz for example)
Also, if its listed, tell us what it says for Manufacturer and Part Number. If those are blank, that's ok, it just helps us.
Also at this point, click the "Mainboard" tab and tell us what it says for "Model" and "Chipset"
Just tell us here, and then we can help you find the EXACT type of memory you need for your system.
For the record, 2 GB is very workable for XP. 3GB will buy you more performance if you multitask, but if you are happy with the performance of the system, then no one can tell you what you really need, just what they'd like to buy for themselves if they were in your shoes.
Here are some screenshots to help you figure out what I'm asking for: