Is this a shared hosting environment? Do you have your own application pool or do you share one? What kind of traffic do you currently experience? Are you using SQL or SQL Express? All of these things can contribute to performance of a site (as well as a few other things).
You can increase performance in a number of different ways. First, you'll want to turn on caching. You can use the link from the home page in the admin section or set the appconfig CacheMenus to true. You could also set the appconfig CacheEntityPageHTML to true to cache all entity information (note that you won't be able to make changes to products or entities in real time however...the changes will not take effect until cache expires or until you turn it off, reset the cache, and turn it back on). You should only set this to true after most (or preferably all) of your changes have been made and you are comfortable with the way the store is set up and you are ready to go live.
You also can download an add-on for Firefox called YSlow (it's free) which can give you real-time statistics on page-load times and performance, and tell you which components you can improve upon.
You currently don't have a lot of memory, and SQL can chew up most of what's available there by itself. You may want to see about bumping up your memory and perhaps switching to a VPS or dedicated server.
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