Front Side Bus
If you have an 800mhz FSB, It's bandwidth is 6400MB/sec. The RAM's throughput should equal the CPU's bandwidth. I assume you have 2 x 512MB in dual channel mode?
2 x PC2700 @ 166MHz = 5400MB/sec throughput
2 x PC3200 @ 200MHz = 6400MB/sec throughput
The PC2700 RAM is bottlenecking your system.