I've been testing WinXP on a K6-2 333 laptop with a whole 64 mb of ram. Once I changed the visual performance options to best performance, and turned off messenger, things were running fine (well, fine in comparison to any other OS I've had on it: 98, 98se, Me, 2k.)
Some will tell you that you need a giant machine with lots of ram for XP to perform nicely, and this is partially true. However, once the pointer and menu options (like shading and that garbage) are turned off it works perfectly. I was even able to turn back on the WindowsXP appearance thing (to get the lovely green start button and rounded buttons) without a noticable performance loss.
If the laptop is vital to your work, I'd say leave 2k on it and just let it do its work. But if you have some free time, give the XP install a chance, fiddle with it, and you might just like it a little bit more.