You cannot get around the simple hardware limitations of laptops...laptops, especially simple ones (not gaming ones), basicly fail at anything aside from flash games really.
Windows vista 64 costs about $150+ (i think), and you might as well get XP for a slightly cheeper price assuming you even have the HDD room for it. XP will take less RAM so you *may* get slightly better performance, as in, you probably wont even notice the difference if there is any, except maybe in load times.