Put Linux on it
No, I know, you need Adobe CS..
I'd boot in safemode and then virus scan (Avast ftw!), registry cleanup, systems internals etc.
Then remove all the crap that you don't need. Perhaps even format and start clean?
Hardware wise, add more memory? The hardware shop are talking shit, you can upgrade it.
Consider replacing the processor too, but I'm not sure how easy that'd be.