Hi Rose
There are two things you can check;
First:
Find out if you can use compatibily mode in XP.
Go the thepalace.exe (or whatever the Palace program is called on your system. You can use the shortcut properties to find target)
Right click on the Palace program and select "properties" here you will find an option called "compatibiliy" click this tab and set the compatibility mode to windows 95. You can even select the "disable visual themes" check box and try the Palace.
Second:
The other problem, and this is a bit of a weird one: HEAT.
Because the Palace software uses 100% of your CPU it will be working overtime when you use it. The weird part is that the Palace doesn't really need that much CPU power and any time you run another program next to it you will find it works fine. In many cases where the CPU is not properly cooled the computer might crash or just shut down.
Now to check this you need some sort of temperature measure program that has a history option. Asus prop has this or you can go for the quick option and install this program: Motherboard Monitor. this will give you a little bar with the temperature of your system.
You can download it from this site:
http://mbm.livewiredev.com/
The trick is to install it, make sure it is running and check the temperature when you open the Palace client.
Perhaps its a good test to see what happens when you just open the software without going to any Palaces first. Because it could be many things, and I'm afraid that one of the problems could be either XP, your graphics card or some driver.
But it can also be the compatebitly or the temperature problem.
Sorry that I can't give you any really specific solutions, I'm afraid Palace and XP is an ongoing battle.
good luck hope some of this helps.