If you had it running locally vs off the Live-CD or DVD you would have better performance given you only have 504MB Ram which means you have a GPU that is stealing system Ram as well.
Linux runs quick even on lower end CPU's, and your performance issues are likely because the majority of your Ram is being used to run Ubuntu Live.
If you have a spare hard drive or if this computer is not your main computer, I would install Ubuntu directly to the hard drive and give that a try.
I have a Pentium III 850 Mhz with 384MB Ram that runs Ubuntu nice and fast on a 13GB Hard Drive. No issues whatsoever. Videos after installing flash plugins were smooth with no problems on an old NVidia AGP 16MB Ram Video card.
You can also get better performance I heard by installing Xubuntu instead which is geared more towards lower end machines, which is at version 9.04 i think.