CPU Athlon 1700+
Ram 768
WinXP Pro

It shouldn't stutter playing MP3s. But it does, about 15-20 times in a 4min song!
CPU usage history shows small peaks of 5%.

Maybe WMP is no longer buffering enuf from disk? What could have caused this? How do I fix it?

My first thought is a dying hard drive, the increasing errors from that are probably causing the pauses. Run some diagnostic programs on it, including one that reads the SMART output.