Thanks Randall,

I'm using as a VST Instrument. I'm not stacking anything at this point.
I'm just trying to lay down a single track (drum track), which contains
a few bars of 16th notes at a tempo of around 140, I don't understand
why my machine wouldn't be able to handle this.

I exceed the minimum requirements on the synth software (my system is a
PIV 2.4 Ghz and 768-MB of RAM) and remember I'm only recording/playing
a single track, so I'm a bit confused.

Sounds like you got enough horsepower.Do you have a lot of processes
running in the background?Check the task manager, and shut of anything
except the necessary windows processes, including anti virus,
firewalls, etc.You should probably check any emu forums that exist, as
someone there has probably experienced the problem you are having.
I have an old pentium 3- 1 gig as a second pc, and it will run about 8
vsti tracks while recording another before it bogs down.If I have anti
virus on , though, I may not get 2 to run.Other than that, you may
want to check out this site for some tips when using windows xp.
http://www.musicxp.net/tuning_tips.php

Randall