physical memory 254MB RAM is completely used with out starting any application/software on computer( just booting Win ME and leaving as it is). RAM usage checked by using "SystemAgent" software tool. How can I use my system with this 254RAM. It runs slow and often no response from keyboard OR mouse. can any one help me? thanks.

Either you have too many startup items being loaded, or are infected with malware.

Google 'msconfig' and see the malware prevention forum for more information.

Or get StartupCPL 2.8 (zip version) from here, unpack, install, go to Control Panel > Startup and carefully check the items in each tab. Disable the ones appearing suspect or -if unsure- list the items here so we could advise.
Personally I consider StartupCPL a little more friendly than msconfig, but it's all a matter of taste.

Startup/malware/bloatware/spyware problems?
This might help:
http://www.mdgx.com/newtip2.htm#ANNOY

HTH

-for startup stuff, I've been enjoying "Starter" by CodeStuff (freeware, http://codestuff.cjb.net/, also listed at snapfiles.com, etc)...
-but be sure to tweak the Options, incl. "show advanced"-stuff, properly, for the best (and most complete) results...
>;]