Honestly at some point a clean reinstall of Windows fixes more than any amount of tinkering. XP gets crufty after a couple years. Back up your files, find your product key, and do a fresh install. It'll feel like a brand new machine.

Have you run a full virus scan AND a spyware scan? They're different things. Norton or McAfee for viruses, plus Ad-Aware AND Spybot for spyware. Run all of them. A slow computer is infected until proven otherwise in my experience.

I build computers for a living and can tell you that most of these problems come down to three things: not enough RAM, outdated drivers, or malware. Check those first before spending money on new hardware.

Before you do anything drastic, try booting into Safe Mode (tap F8 when the computer starts up). If the problem goes away in Safe Mode it's a software or driver issue, not hardware. That one trick narrows down half of all PC problems.