Xampp + Windows and you've used all your memory.
Linux + Mysql/Postgresql + PHP + Lighttpd/Nginx + TFSCMS might be a good combo.
Xampp + windows xp = 400MB memory. = 600MB Free.
xampp + windows server 2003 web edition = 300MB memory. = 700MB Free.
So no, you are bigtime wrong.
xampplite = about 15 - 25MB memory usage.
On my windows 2003 server, I spend about 0 - 1% CPU resources with Crying Damson, xampp apache, sql and the os itself. Using a 2.6Ghz dual processor.
Crying Damson 3.6 with aprox 4MB map = 26MB memory.
26/4 = average 6,5MB /each mega byte. This may vary depending on map and size.
But I guess about 10MB at max each MB.
700MB free space = 70MB.
Lets safe 100MB for players logging in activity.
600MB free space = 60MB map. Possible to run, will take a while to startup, once its running it will be rather lag free as long as it is not saving the map etc.
In case of windows XP instead of server edition, 50MB map.
You do not run Vista or Win7 on a ATOM 1.6Ghz processor. Unless you are a complete idiot. If you have it, Download LinuxMint, follow the great user guide they have there. You will get a Linux Server set up in a matter of minutes. It looks like windows so you won't have any big problems with it if you follow the guides. Takes about same resources as Windows server 2003. And has a very nice GUI for people who have never seen a linux comp before.