Is your windows XP 32 bit or 64 bit. If it is 32 bit it will only recognize the 3.25gb or ram. Not sure about the processor problem though I am sure someone on here will have a suggestion for you!
*Edit
Have you checked what the bios reads? Does it show the full ram & processor readings?
*Edit
Have you checked what the bios reads? Does it show the full ram & processor readings?