Looked at settings in BIOS. Hyperthreading was already disabled. I disabled sound. There was a CPU speed option of "Normal" or "Compatibility". The description said Compatibility was "a lower compatibility speed setting which lets you accommodate speed-sensitive applications". I left it set to Normal.
I then ran the latency test from the 10,04 live CD. The numbers were very close to 25000 and 25000. (a 20x improvement!). I did the same thing with the 8.04 live CD. Almost the same: 25000 and 29000. I then repeated the test with the installed 12.04. Got around 500,000 as before.
It may be the the 12.04 install isn't optimized for LinuxCNC. This is an old machine with a CD drive (not DVD) so to get 12.04 installed I had to do an install of the OS and then install the real time kernel and then linuxCNC. So it is very likely something is not optimum. I could try to find an IDE DVD drive and install and then retry but I think I may just live with 10.04 and LinuxCNC2.5.0. I am open to ideas for newer version but I am not sure it is worth the trouble - I would welcome others thoughts on that.
I installed 12.04 as detailed in section 7.2 here:
linuxcnc.org/docs/html/getting-started/getting-linuxcnc.html
RAM on this PC is 1 Gig.