Something's using CPU time - idle should be around 98%.
You have 512 meg of RAM, which is sort-of the knee of the performance curve - more will make a small difference, but not a lot.
Do you have ZoneAlarm? With that, you can stop stuff accessing the internet the whole time. It's a pain when you're first setting it up, but once that's done and you've told it what may and may not use your internet connection, it saves a lot of churning.
I've blocked several auto-updaters that love connecting to mummy, and that helped.