gloucester,
I can't even begin to look into why this may be happening, however a few points to try:
1) increase memory_limit in php.ini
2) check filesystem permissions for whatever user the apache service is running on, ensure temp folder has permissions
3) run the Windows Performance Monitors, and see what exactly is happening with CPU, Memory, Disk, etc.
Under a test environment I've used XAMPP (basically apache+php+mysql+phpMyAdmin) very successfully from anywhere between Windows 2000 and (cough) Vista.
In a production environment I have had Windows 2000/2003 Server with Apache AND IIS (different setups) with no difficulty.
Be sure that the Windows 2000 Machine isn't overloaded with services as well, using the performance monitor will really help isolate this issue (or rule it out for that matter).
Your Apache/PHP Setup is only as good as your windows setup.
Best of luck, and see here for info on System Monitor.