My PC can handle lots of open windows.
Photoshop, iTunes, Firefox (with many tabs open), MSN messenger and often some other things at once.
The PC is fine now, I've lowered the overclock to 3.60GHz (from 2.66GHz it was at 3.70GHz) and it appears more stable - with my new PSU the temperature of the CPU has increased greatly, to my annoyance.