32mb? 64mb is miserably sluggish. 128mb is tolerable. I think you should try E-bay or SurplusComputers.com for some cheap old memory. Unless the system you're trying to use won't accept more than 32mb, in which case you're SOL.

I concur, I really don't recommend even Win 98 on that kind of system, basically on Win 95 or the combo MS-DOS6.21/Win 3.xx

While trying to install 2000/XP the installation wants at least 128MB of RAM, it is the only way that you can install 2000/XP. If you really have to run XP on 32MB of RAM then the only way you would be able to install 2000/XP is if you can borrow the other 96MB RAM from a friend or something for the installation.
 
I would honestly suggest you to rather install Win98 than 2000/XP, 2000/XP is already extremely slow on 128MB RAM.

You can in fact install Win2000 on 32MB of memory as that is the lowest supported configuration for that OS.
 
Apparently MS finally decided to up it to 64MB. But I have the Gold release and it specs out 32MB as the minimum.
http://www.microsoft.com/windows2000/professional/evaluation/sysreqs/default.asp
 
Having said that the lowest I've really run it in was 96MB. I would highly suggest 128MB as a minimum and 192 - 256 as starting to get comfortable.
 
With XP, the minimum required is 64MB and after reading the above, I'd think you slightly mad to try to run XP in anything less than 128MB.

I was able to install WinXP pro SP2 on an old machine Pentium-MMX 200, 32 RAM, 6G HD. It takes a while to start, but runs fine otherwise as long as only one or two apps are open at a time. To get XP to install, I had to use n-Lite to remove the minimum memory check.

Sorry forgot to mention that I use FAT32 and not NTFS, no wallpaper or welcome screen, only one user... but Visual Styles are enabled.