Hey there SandyStone,
First things first, assuming you are using VirtualBox; is have you installed the virtualbox guest additions? This should greatly improve the performance of the guest OS! If you have already installed guest additions and still experiencing lag, have you tried playing around with your cpu visualization options? I have found that some of the emulation settings provided can degrade performance if enabled. Its also hard to tell you exactly which settings as each PC will perform differently with different settings and will require some tweaking and playing around with (This goes for all visualization software, such as VMware (which also comes with their version of guest additions) , i have found on VMware sometimes setting the ram too high (Despite having more than enough memory for host OS) degrades performance as opposed to having assigned less memory).
But if you're set on reinstalling and prefer a dual boot setup, you could re-size one of your partitions (most likely the /home, granted you have enough space) and use the freed up space for your windows boot. Although this could possibly have issues depending on your original partition configuration, if you had created all those partitions as primary and are using GPT or MBR partitioning table. From just making assumptions about your PC (Due to you wanting to install XP) you probably don't have UEFI supported motherboard. But this doesn't necessarily mean bad news as it could still support GUID and all this could even be irrelevant depending on your partition setup.
Worst case is that you'll have to reinstall both OSes, but first give the re-sizing option a try... if you do reload everything from scratch install XP first, and then mint.
Let me know how things go, hopefully it was a simple VM config setting that needed changing or those guest additions.