What you're experiencing is called paging or swapping. When the OS and all processes allocate more memory that you've got the kernel will attempt to swap dormant process to the page file. This takes time as the process's address space has to be written to disk. When a dormant process that as been swapped to disk become active, the operating system will need to find another process that has become dormant swap that to disk so that the first process can be swapped in to RAM. Again this takes time as two processes have to be written to and read from the swap file.
The operating system can take a gig or two (Win7/8), XP tends to have a smaller footprint, background processes will also consume memory. That doesn't leave much to run Sins on.
Virtual memory, aka swap file, is not going to help here. You're going to need more RAM.
