At what point will I start encountering performance issues MS SQL 2005

There is no way for us to know without knowing how much activity is occurring or expected to occur on your database.

I can say that you're running on completely outdated Windows and database versions, neither of them have been supported by Microsoft for many years. Windows XP is also not a production operating system, so if you expect to have more than 2-3 users access this database, you will probably have performance issues immediately. 4 GB of RAM is also barely enough to support a SQL Server instance.

Unless and until you upgrade your OS and SQL Server to supported versions, and increase the RAM, there's not much advice I can give.

Edit: closing as duplicate of:

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