I am currently running on a PIII 800Mhz with 256M ram, Windows 2000 Sp3, a machine I set up about 2 weeks ago, clean install. I have also run this on a Celeron 500Mhz with 128M ram, same OS. I have very little else on the machine, and nothing running, save for Zone Alarm and a VNC for remote administration. I am running an Audigy2Z for sound. Since this is a "dedicated" machine for this task, I have not wanted the "usual" general purpose tools to be on this machine. I added the VNC when I set up the PIII, but the lock-up issues have not changed with it or without it.
For what ever it is worth, I am still getting wild folders being created today (this is the first time this has happened), after rebooting and such. I have had no troubles getting programmed channels to change and record on time, ever since I learned (the hard way) that the Perfect trax option setting could prevent a timed event recording from starting. When the program is running, every timer event has been properly executed. Setting up the timer, though, will sometimes lock-up the program when you click the "save" or the"close" button. You get back to the main screen, but the meters quit moving...and if you try to close TT, you get the "not responding" box...and basically there is only the power-off solution left.
Operating system still is running, still responding...I can navigate...I can perform a proper shut-down....but it will never shut down! Unless I hold down the power button, the only thing I will be left with is the generic Windows shutting-down graphic box on the icon-free blue desktop.
Well, that has been my experience with it...the shutdown part keeps bugging me, because I cannot re-start the machine with a command, or any normal way...which prevents full remote control. This folder thing which just popped up though, is just crazy.
I am glad that problem is fixed!! 
