I have a somewhat similar laptop, Presario 1685, to be exact, with some non-standard upgrades, details for doing them yourself here:
http://www.mgrudkin.clara.net/
and here:
http://www.compaq.com/athome/support/msgs/1255-1275/
Using the instructions from the above sites, if you take your 1255 apart and replace the proc with a K6-2+ running at 500 or 550 MHz (should still be able to find one at either
http://www.newegg.com/ or
http://www.computersurplusoutlet.com/ for around $50), this should solve most, if not all, of your problems, as the k6-2+ has 256KB of on-chip L-2 cache ram, instead of 64KB on the earlier K6-2, and it is made with a .18 micron die size, versus .25 micron, which means it runs ALOT cooler as well.
You can also replace the existing HDD with a 20GB HDD using a link that is on Mike Rudkin's page (above). If you have the option, try reinstalling Win2000 with SP-4--it tends to be less proc-intensive than XP, and doesn't hog quite as much precious HDD space. I wonder if you were aware that the 1255 was marketed with only Win98, 1st edition, and was "officially" unable to run Win2000 (according to Compaq)?!