I recommend that you upgrade your .NET Framework to version 3.5 SP1, found
here. This will solve any Framework issues for quite a while.
As for RAM, you will find much smoother performance if you upgrade. 384 MB of RAM is sufficient to run Fiesta, yes, but it will be choppy. I personally suggest a 2GB minimum for most games, but this is at your discretion. 1.5GB should be your minimum for reasonable performance, and 3GB will optimize performance. 4GB will be overkill for Fiesta.
Your graphics information can be found with the dxdiag tool as well. It is under the third tab, under "Display." If, by any chance, you are using an onboard graphics chip, it will decrease your Fiesta performance significantly, and the RAM upgrade becomes more important.
I think the Framework is the problem, as it has been an issue in the past for some users. However, others may have a better and/or more accurate diagnosis. My suggestion is that you upgrade to the latest version of Framework, and see if that resolves your issue.
As a side note, there is a
third service pack update for XP. It isn't necessary, but I would recommend getting it.