How can I speed up my Windows XP PC?

One of the stranger aspects of computers is that they do indeed suffer from old age, as you are noticing. Oddly enough, the longer you use a computer - particularly a Windows PC in my experience - the slower it ends up running. It could be a plot forcing you to always buy newer and faster systems, but more likely it's just that as you use the system, you put increasing levels of demand on the hardware with different helper apps, more running in the background, animated desktops, flashing icons, custom cursors, RSS readers and stock tickers, and even programs helpfully checking for updates at random intervals. It all adds up.
One strategy for improving things is rather draconian: back up your computer files, reformat your hard disk, then reinstall the OS from scratch and the key applications you use. Total time lost? Probably a couple of days by the time you get everything restored, but it's really a pretty good annual task for PC users, in my experience.

There are also a variety of specific steps you can take to try and isolate the resource hogs on your system and give them the proverbial boot too, and Bob Rankin has generously granted me permission to reproduce his amusing recipe for accomplishing just that.
Here's Bob's recipe for Making Windows XP Run Faster:
I have this theory that sludge builds up inside a computer over time, much like an automobile engine. After a while, it doesn't start right up like when it was new, it stalls unexpectedly, and performance is sluggish on the (information) highway. Is there something like engine cleaner we can pour into our personal computer to restore that "like new" performance? Actually, yes!
Here's my special recipe to clean that icky goo out of your computer's pipes, so Windows will start quicker, run more reliably, and go faster on the info-superhighway.
INGREDIENTS: Cyber Sludge Remover
1 tbsp Windows Updates
2 cups Virus/Malware remover
3 lbs Software Cleanup powder
2 tbsp Hard Disk Scrubber
1 slice Defrag
1 tsp Startup Weeder
1/2 cup Registry Shavings
2 cups Virtual Memory Sanitizer
1 Extraneous Services Remover
DIRECTIONS
Mix all ingredients together in large bowl
Sprinkle over monitor, keyboard and system unit
Click to restart
If only it was so easy! But actually, it's not so hard to take action on those items I listed above. Here's the scoop on how to implement each step.
Apply Windows Updates
If you run Windows and you use the Internet, you simply MUST stay up to date with the system patches that come out in response to the privacy and security exploits that are discovered every week. Failure to do so is an open invitation to hackers and crackers to invade your privacy and enslave your computer in a spam spewing network. To get the latest fixes and configure your system for automatic updates, open Internet Explorer, click on Tools, then Windows Update.
Clean out Viruses and Malware
Are you running a good anti-virus program, with automatic updates? Have you scanned your system for spyware, adware and other unwanted pests? If not, see my articles How can I avoid computer viruses? and Spy, Counter-Spy for details on how to protect yourself from those risks. Viruses and malware can slow down your system a LOT, because they use your resources to generate popup ads, send spam, and often interfere with the operation of good programs.
Remove Unnecessary Software
You may have a bunch of software packages on your hard drive that are no longer needed, or they were gratuitously installed when you downloaded some other package. Toolbars, file-sharing programs, free email enhancers, online shopping "companions" and download managers are notorious for this practice. These uninvited guests can put a big drag on your startup time, cause web pages to load slowly, and generally bog down your computer. Go to Control Panel, then Add/Remove Software to see what packages are installed. Remove the ones you know you don't need, and do a web search to learn about the ones you're not sure about.
Scrub That Hard Disk
Both Windows and application programs tend to leave temporary files lying around on your hard drive, taking up space needlessly. A hard drive that is close to being full can cause Windows to act strangely, and will slow down or interfere with efficient disk access and virtual memory operations. And if you surf the web a lot, your temporary internet files folder can become quite large, causing Internet Explorer to slow down or malfunction. Cleaning up unneeded files, scanning for disk errors and defragmenting the hard drive can help to restore some zip to your system.
First, open My Computer, right-click on the C: Drive icon, select Properties, then click on Disk Cleanup. (Optional: Select the More Options tab to find and remove even more unwanted files.) To run a defrag, open My Computer, right-click on the C: Drive icon, select Properties, then Tools. Click the Check Now button to scan your disk for errors. When the scan is complete, click the Defragment Now button to run the defrag, which reorganizes your hard disk so Windows can find and access files more efficiently. (It's highly recommended that you close all running programs and disable your screen saver before running a defrag. Otherwise, updates to your files may trigger defrag to restart endlessly.)
Okay, Now Take a Breath...
We're more than half-way done with the process of cleaning the junk out of your computer. The rest of the steps may seem a little more geeky, and you can skip any or all of them if you don't feel comfortable digging a little deeper into the workings of the Windows operating system. But there is definitely bang for the buck here. Some of peskiest Windows performance problems can be solved by giving attention to these areas.
Slim Your Startup Selections
There are certain programs that Windows will start every time you boot up your system, and during the startup phase, they're all jockeying for a slice of your CPU. Extra or unwanted items in the startup list will defintely increase your startup time, perhaps by several minutes. To manage the list of startup programs, click on Start / Run, then type MSCONFIG. Press Enter, then select the Startup tab. If you see items in the list you know you don't need to run at startup time, UNcheck the box(es) next to them and press Apply. Some common examples are things related to AOL, RealPlayer, Napster, instant messengers, and video managers. If you're not sure about an item, no big deal. You can turn it off, restart your PC, and see if everything seems to work. If not, you can always go back and re-enable an item in the Startup list. This helpful list may help you decide what to keep or drop.
Clean Your Registry
The REGCLEAN utility from Microsoft, though no longer officially supported for Windows XP, cleans your system registry of unnecessary entries that are created when you install or remove programs on your computer. Sometimes an "orphaned" registry entry can confuse Windows during startup and cause a delay. And in general, slimming down your registry will make Windows run faster. Note: This program is no longer officially supported by Microsoft, but many users report that it works fine on Windows XP systems. You can also try RegSeeker which is a highly rated registry cleaner.
RAM and Virtual Memory Settings
When you run out of physical (RAM) memory, Windows will use a check of your hard disk to create virtual memory. This is a nice feature, because it allows application programs to access huge amounts of memory. The only problem with virtual memory is that it's a lot slower than real RAM. So installing extra RAM on the system board is a good idea because it's pretty cheap and easy to pop in. Find out how much your system will accommodate and install the maximum amount.
Extra RAM will probably do more to boost your overall system performance than anything else!
But getting back to Virtual Memory, it's wise to let Windows manage the amount, unless you are a Wizard, with a capital W. Go to Control Panel / System / Advanced, then press the Settings button under Performance. Click Advanced again, then press the Change button under Virtual Memory. If System managed size is selected, you're all set. If you want to fiddle with the Custom Size options, be my guest!
Turn Off Extraneous System Services
We're heading into uber-geek territory here, so be forewarned. Windows doesn't know exactly how you're going to use your computer, so it starts a whole bunch of system services that manage network connections, database access, error reporting, remote access and other nerdy-sounding things. You may not need all these services, and disabling some of them can reduce your startup time and system overhead. But choosing which ones to nuke is a bit daunting, unless you are an expert on Windows operating system internals. Here's my advice... look at these explanations and advice then disable only the ones that you're sure about. If you encounter a problem, you can always go back and turn a service back on.
Thanks for your terrific recipe, Bob! For those of you that don't know Bob Rankin, he's one of the two guys who have been driving the Internet Tourbus for many, many years, and runs Ask Bob Rankin (now why is that kind of domain name so familiar? Hmmmm...)