Unfortunately, you may find that there is nothing wrong with either the software or Windows XP.
Windows XP has advanced beyond being terribly DOS “friendly”, most of the BIOS/DOS function calls are now emulated (where they exist at all) by the NTVDM which is slower than it actually working in the hardware. Additionally, NT/XP actually gets in the way of some of the function calls directly to the hardware that were all to common in the DOS days to get some speed out of an application– for example accessing hardware directly.
There are several articles that might help you (here) but I think you will find that the application may not ever run correctly in WIndows XP. (Sorry.)
One thing you could try is to try is to create a PIF file to tell Windows XP how to better run the application. Here are some articles to help you with doing this task.