The AVG program you have installed is not an anti-virus program it is the AVG Anti-spy program a good program, keep it for scanning.
Click here to get AVG FREE

Many folks will advise something else, but I personally use the built in Windows Firewall and have had no problems. If you run a clean machine and are careful where you surf and DON'T do any P2P file sharing then I say go with it...it is all ready on there.
need a better processor?
....No I don't think so...
Since your slowness problem comes with multi-taking, game playing the I would say your problem is definitely not enough RAM. You only have 512MB, not enough really. RAM is basically pretty cheap and an easy way to speed up the computer. Guild Wars appears to require a minimum of 256MB...half of what you have. That doesn't leave much for the "rest of the computer" to run on...graphics especially.

Go to Crucial.Com
Do their online scan and they will tell you exactly how much you can add to the system, exactly what to buy. It is as easy as pie to install, open the case and plug it in. Crucial is probably one of the cheaper sites to purchase RAM on the net.

To stop unwanted Starting items I recommend Mike Lin's Start Up Control Panel. A neat little free program. Download and install. Takes a few seconds then you will find it in your Control Panel, listed as Start Up with a little Computer Icon. You can go in there and stop pretty much anything from running at start. Shut down the computer, restart and see if that helps. If you find something you stopped using the program doesn't work just right without running at start up then go back in and re-enable it's auto start. Reboot and it should be fine.