As far as having problems with burning CDs, can you describe exactly the problem you are experiencing, and the burning software you are using? It could be anything from a software issue to a hardware malfunction (such as the CD burner going bad).
Can you tell us the exact model of your Compaq computer? The reason being, it may not support more than 256MB of ram (total). With the exact model we can determine if 2 256MB sticks of ram will work. I'm sure 1GB of ram is impossible on this old of a rig.
As for your old computer, I'm afraid that other than ram and perhaps a hard drive upgrade (what size hard drive do you have?), there isn't much else that can be done. I use my K6-2 for playing old games, office use, and dial up internet. For these things it works fine. Burning CDs on your computer, while I'm sure it works, would be a job much better served with some newer hardware. Do you know of anyone giving away an old computer? I have several friends with 800-1000MHz Pentium III or AMD Athlon computers that are free for the taking. You may want to see what you can find in your local paper.
I'm sorry to hear you're having trouble reinstalling your software. This computer is far too old to have windows XP Pro installed from the factory, so I assume you or someone you know did it the first time around. Do you know anyone handy with computers that can help you with the reinstall?