Your Virtual Windows XP installation, used for XPMode is equipped with 256MB of RAM by default.
You can change this value. Follow the steps below:
1. Open the Virtual Machines folder in Windows 7. This can be achieved by typing the name of the folder in the Start Menu.
2. In the folder you should see Virtual Windows XP.vmcx. Select it.
3. Make sure the Virtual Windows XP is not running or hibernated. If it's running or hibernated, open it (by double clicking it) and power it down. You can use the command shutdown -s -t 0 for this purpose.
4. With the Virtual Windows XP.vmcx selected, click on Settings from the action bar.
5. In the left pane select memory.
6. Type the new value for the amount of RAM you would like to assign to the Virtual Windows XP installation. Below the input field you should see the amount of available (physical) RAM to assign.
7. Press OK.
8. Open Virtual Windows XP.vmcx again (by double clicking it) and enjoy the new amount of RAM available to it.