Okay. Thanks. Did some testing on an nLited XP Pro SP3 virtual machine with 128MB RAM. It's not as stripped down as TinyXP but I think I've removed quite a bit of fat.
Added ~500 simple epub files (no images, minimal formatting) and so far so good. Memory usage peaked at ~75MB (forgot to monitor virtual memory) while adding the books but now it's idling at ~25MB (~90MB virtual memory). Available memory dipped to 9MB but at least I didn't get any out of memory errors. I was pretty surprised that adding ebooks to the nLited XP Pro virtual machine felt faster than adding them to my laptop (Vista Home Premium, Pentium Dual-Core T2080 1.73GHz, 2GB RAM). Now that I've pondered it, though, it might just be the connection. My laptop's getting the books via 802.11g wifi and the virtual machine is getting them from the same computer running VirtualPC.