My best guess is that it is a software issue. Here's what you can do to find out:
1. Sometimes an antivirus (like Symantec) clogs a lot of memory and CPU time. close your anti-virus application and see if there is any improvement in performance.
2. If you are using some P2P software, close them too. some of these s/w like emule clog a lot of memory.
3. Check your Processes in Task Manager. Use Ctrl+Alt+Del and select the Task Manager tab. Here you'll find all the foreground and background processes running on your machine. Click Mem Usage column title and all the processes will be sorted in the ascending order. Now check which processes are occupying most of your memory and have high CPU number. Just shut down that service temporarily and see if your PC performance has increased. If it works, and the process if of your trusted software, may be you'd need to find out more on that software.
4. Task Manager sometimes does not display all the processes. Some virus/spyware skip Task Manager. Download a small tool HiJack from Trend Micro, the famous anti-virus compnay. Here is the link:
http://www.trendsecure.com/portal/en-US/_download/HiJackThis.exe
Execute and scan your pc with this tool, and you'll get a list of all processes running on your machine. check if there nay unknown process running. It could be a virus or spyware. You can then search more on internet about that.
5. Try running your PC in safe mode and check if there is nay gain in PC performance.
If nothing works, may be you need to reinstall Os or check your hardware.

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