For your spec, I would suggest Xubuntu whichever route you take you'll
get a leaner install.

I have Xubuntu 8.04 wubi on a laptop and it takes a while to load up
but thereafter runs fine. I think writing to hard disk either to other
OS partition or Xubuntu home (wubi) to saving files would be easier
via wubi. add an icon on desktop to access usual C drive (ntfs on
other OS is also OK)