OS slow down

I have a client that is running an HP Pavillion,with 384 megs of ram. Whenever the client opens a word doc the system resources drop dramatically ( 84% free to 61% free), and the machine slows to a crawl. I have disabled everything that is unnecessary that was running in the background and checked the condition of the ram. It seems that programs are not releasing memory cache or something. I have also tested the mainboard and cpu with Tough Test Pro software and all checks fine. I am at this point at a loss. any help would be appreciated.

thanks,

Trevor Peterson MCP, A+