According to Ars Technica the old operating system is working considerably worse than when it was released in 2001. It is especially slow if you are still using Internet Explorer 6 or 7. The culprit is the svchost.exe, which is chewing up the entire processor. Sometimes it can take an hour for a machine to return to normal.
Redmond thinks that the problem is Windows Update. Machines using Windows Update retrieve patch information from Microsoft's servers. That patch information contains information about each patch: what software it applies to and what knowledge base article it relates to, and, critically, what historic patch or patches the current patch supersedes. Since Windows patches are cumulative a fresh install of Windows XP, does not need to install all of the dozens of Internet Explorer 6 patches sequentially; you can generally just install the latest patch, and it will include all the historic fixes because it supersedes the historic patches that introduced those fixes.
But the Windows Update client components used an algorithm with exponential scaling when processing these lists. So while a new machine, that processing is almost instantaneous. On an elderly machine it is very slow.
Microsoft thought that it had this problem fixed in November when it culled the supersedence lists. It tried again in December but that didn't seem to help either. It is probably better to scrap XP anyway.