Computers lags (Only in video-related tasks)

At least that's what i'm noticing.

Here's the issue, subject: Compaq Presario 5650LA
PIV:2Ghz.
1GB RAM
Videocard: Ati all in wonder radeon.
OS Windows XP: SP2.

Every time i start a task that needs some sort of "advanced" graphic commands (Read: Games, emulators, even running videos on media player classic) the video/programs starts to lag...to the point that the picture is frozen, the sound suffers the same problems...and it takes a while to close the aplication.

Additionally, the fan sounds more loud than usual, it's like....it's at max capacity 100% of the time (the sound starts after executing a task in windows, and stays like that)

I updated ATI drivers, no good, scanned for virus and spyware, same result,  i checked inside, to make sure everything was installed and connecter firmly (mainly the RAM), no good, i used scandisk/chkdsk and defragged teh volume and is still the same.

Note that i had this problem before, formatted, and it's still there (I don't recall how or why it started, i noticed the issue some months ago, i installed Age of Empires and to me, it seemed weird that such an old game lagged with my current computer specs)

Any suggestions? need more info?

I'm frankly sick of people misusing the word "lag"