Your machine ought to be running very nicely with those specs. Have you checked to make sure that you're all clean with Spyware/Adware? Ad-aware, SpyRemover (formerly Spy-Bot), and HijackThis (read the directions with this one) are all great tools. I would also update your virus definitions and run a scan. That doesn't sound like hardware problem, more of a software issue. My fiance had a similar problem and as I was digging through her system found that she was FULL of stuff. Now she's running just as fast as ever. Her machine is only 800mhz with 128MB RAM.
Hope that helps some!
-Jonathan
