Why not? With at least 2gb of free space left for virtual memory even without the paging file creation enabled you won't be seeing out of memory or drive space errors until you start filling the drive with programs and files. For just the basics XP will run like any other OS on that amount of space.
If you are planning this for the build in your sig one thing you may want to consider before adding a 3rd 10gb drive for that would be going with one or more larger and faster HDs as well as adding more memory to see an overall improvement on the older system there.
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