Of course re-installing Windows is the easiest way to get you computer nice and fresh but it's also a pain... you'll need to re-install all your applications, a process that can take days. I have run XP for over eight years without re-installing the operating system, even though during that period I must have tried over a thousand programmes, each one of which is a potential problem and might leave behind crufty nonsense when you delete it.
1. Is your hard drive churning unnecessarily? Make sure you have enough room on your boot drive (usually C:). Otherwise the virtual memory requirements will slow your system to a crawl. If you have a second drive (or even a second partition) assign application (e.g. PhotoShop) swap space to it instead.
2. With no apps running, bring up Task Manager and see what the processor is doing -- should be nothing. Otherwise this activity could be a sign of spyware. Grab Spybot Search & Destroy and use it. Likewise I recommend Panda Cloud as anti-virus since it has a small footprint on your machine.
3. But be aware that antivirus and anti-spyware programmes install components that run in the background and can also slow your computer. I am sure to configure SpyBot so this is not the case. Plus I turn off Panda when I am performing or need all my computer's capabilities on demand.
4. Have you been installing and uninstalling a lot of applications over the life of your OS? A good registry cleaner can get rid of disused entries and make a real difference in performance. I use ccleaner, but it's only rarely needed.
5. Windows Indexing service may be getting out of hand. I have it turned off on my performance machine. See this article.
6. For full optimisation, turn off unnecessary services. Surf Black Viper for more than you need to know.
Hope these tips help! Remember, every computer needs maintenance.