Of course it works fine with XP, that was the target specs in 2001 when that OS was released. Maybe try a Linux distribution from 2001 and you'd have a fair comparison.
I remember how XP was received. It was slow as hell compared to Win98 and even to Windows 2000. And 256MB RAM is too little for XP, W2K would be probably fine.
I have successfully run XP on 96MB of RAM. It ran surprisingly okay on a fresh install. Multitasking, Firefox and everything. As it aged though it declined badly. XP never was very good at self-maintenance.
I have ironically had similar-to-worse results with running 2015 Android on 2011 hardware, which has 512MB of RAM. The cheek!