still seems like memory. Normally, I'd guess that adding the extra program pushed Windows into using memory that had previously sat unused, but the fact that you have so little would make that unlikely since with 256mb it is all being used
It could be norton 2006, since it integrated so deeply into the operating system, but I can find no mention of this anywhere
Therefore, I'm leaning toward it's more ready for the junkyard than we know.
This is what i would do:
In safe mode, uninstall norton 2006, or, use safemode with networking and check for norton updates
I would run a windows repair, using the windows xp cd. This will install a fresh copy of windows system files, setting you back to the time of the disk (rtm, sp1 or service pack 2)
If that failed, I would swap in a new memory stick, or at least test the one that is there using something like memtest86http://www.memtest.org/