avast is an anti-virus application and avg anti-spyware as it name implies is anti-spyware there is some crossover in what is detected by both applications and when combined provide better overall protection.
The avg anti-spyware you will notice detects cookies which aren’t malicious but could track you browser activity and are as has been mentioned are Low/Medium risk by their classification. Since you don’t give any examples as to what was found there is no way we can say what that risk is.
The more programs you run the more your RAM has load put on it and with such a low amount of RAM it has to swap information out to your hard disk, what is called a pagefile (formally called a swapfile). This movement of data and sharing of RAM slows your system, you would be advised to increase your RAM.
Windows XP’s firewall is better than no firewall but, it lulls you into a false sense of protection, it doesn’t provide outbound protection. I would say you need to look at a third party firewall to protect against unauthorised outbound connections.
Whilst the windows XP firewall is usually good at keeping your ports stealthed (hidden) it provides no outbound protection and you should consider a third party firewall.
Any malware that manages to get past your defences will have free reign to connect to the internet to either download more of the same, pass your personal data (sensitive or otherwise, user names, passwords, keylogger retrieved data, etc.) or open a backdoor to your computer, so outbound protection is essential.
There are a number of freeware firewalls that provide outbound protection, PC Tools, Comodo, Sunbelt Kerio, Jetico, etc. I used to recommend Zone Alarm (ZA), but that has grown to be very bloated (38MB download some say), with a number of additional pieces of trial software in the hope you might purchase. These additional applications ZA installs, will use/require more resources, putting further load on your limited RAM.
See some firewall tests for comparison, some are freeware but many are paid for versions http://www.firewallleaktester.com/tests.php. Also see http://www.thefreecountry.com/security/firewalls.shtml