First - don't get VISTA or you will need to upgrade your RAM too and it will still be slow. (We purchased our daughter a laptop for college - it came with VISTA. My DH formatted that baby and installed XP on it - much faster!)
Second - see what is running in the background - this will slow your machine down terribly. Example: when you turn on your computer MSN will automatically start if you IM people (or whatever instant messaging system you use). Also - many music downloand and file sharing programs will run "quietly" in the background so they are ready for you but you may not even use them. You can find this information in your task manager.
Lastly - Get FREE AVG and then run a scan. I have had AVG find things that Norton (Symantec) and McAfee does not find. Perhaps you may have a trojan horse in the background that isn't found yet by your software - AVG will find it and fix it.
Good Luck!