i have never tried system mechanic but:
to remove and stop spyware:adaware,spybot and spywareblaster are the very best in my own opinion.
free firewall and antivirus software i use are AVG antivirus click here and Zonealarm click here quite a lot of people use these and they work very well together.
disk cleanup in xp is ok but i find cleanup click here does a better job
defrag in xp is also good(based on diskeeper) but diskeeper lite also does a better job click here the paid for version is well worth the money also.
try regseeker to clean the registry also click here
try tcp optimizer to tweak your internet connection(read the faq)
all totally free and work well for me on xp home.