One thing I noticed in your config was this line:
set-variable = thread_concurrency=8
You said you only have a dual CPU server. Thus, you should change that value to 4.
Since you are using MySQL 4 now, you really need to add these to your mysql.ini file:
query_cache_type=1
query_cache_limit=1M
query_cache_size=8M
Those are new settings available to MYSQL4 that will help a lot.
And you say you're getting a total of 2 GB of ram? Then I would suggest maybe doubling your key_buffer size, but otherwise it should run pretty well with that setup.