File Browsing Painfully Slow - Open / Save as dialogs

Running one of the latest IBM PCs, pentium 4, hyper threading, 512Mb RAM,
Windows XP, Office XP.

From the start when I tried to browse from an Open or Save As type dialog
within any MS Office program specifically, there might be others as well, but
that's mostly where I've noticed it, it would take 5-10 seconds pause after
clicking the drop down list at the top before it would do anything.

But then after a while it got worse. Now all browsing of files within one
of these dialogs is slow. Select a folder to open then go away and come back
in a little while. Then do it with the next folder.

It's got to the point where I've gone old school style, typing in the full
path directly for files as it can literally take several minutes to navigate
through the folders to find the file.

There are only a couple of us here with new computers running Windows XP,
and we are both finding this same issue.

I tried going through installing all the latest updates. Upgraded from
Windows Update to Microsoft update and put in all MS Office and MS Windows
updates and nothing helped with this problem.