The easiest way to see what is starting with Windows is to look in msconfig.
(Start>Run>
msconfig>enter) then look in the startup tab.
Stuff that doesn't absolutely need to run is basically everything except security apps that you don't need.
It is not always a good idea to disable all such entries; they are best configured from the apps' own settings if possible, and some that run as a service are best configured via services, under administrative tools in the control panel.
Here's why. At the same site are some
seriously interesting instructions for tweaking XP.
However, that all may be somewhat irrelevant. It started after upgrading IE8, and was OK before. Does the problem manifest when IE8 is not open?
If not, time to start selectively disabling possible conflicts. I'd start with the linkscanner in AVG, then S&D's teatimer (if active.) If you have the full AVG suite, the windows firewall (or AVG's) should be turned off.
It could be that the extra load required by the new and improved IE has just put the strain required on the camel's back. In which case more RAM is the answer. 512 is getting a bit marginal with todays RAM hungrier apps.
But I suspect something isn't playing well.