System restore b4 you added the last program to c if things get better
start: all Programs: Accessories: Sytem Tools: System Restore.
Or you could back up all your files and then do complete reinstallion of windows xp or a repair using your windos xp disk.
With avg8 a lot of people are complaining that it takes too long to scan hence causing slowness. Addiding another 1GB could help as well.
Normallyi use two to three programs and not more than that to do scans, anti virus software, adware and malware.