Please help improve my computer’s performance!

Please help improve my computer’s performance!

My 3.5 year old laptop is starting to show its age, but is still very usable for my purposes. I do not want to replace it, but I do want to improve its performance. My knowledge of computer use is pretty good, but my knowledge of computer maintenance is pretty limited. The main problem that I have with it is that it is starting to run quite slowly when running multiple applications (for example, playing 4 tables of poker, running an antivirus scan, downloading a video, all at the same time). It also boots very slowly.

Some background –
The computer is a Toshiba Satellite A100, running Windows XP. I got the following info from crucial.com’s scan – 1GB currently installed memory, 4096 MB maximum memory capacity, CPU speed 1052 MHz. I use Zone Alarm’s free firewall, have AVG Antivirus Free (scanning daily), run CCleaner at the end of all online activity, scan for problems with Spybot’s and Malwarebyte’s free scanners every 1-2 weeks, and de-fragment whenever necessary (checking every couple of months).

Is there a way for me to diagnose whether or not upgrading memory will significantly improve performance? A computer tech I spoke with (but who never saw the machine) recommended backing up all of my files externally, then reformatting the computer from scratch. I don’t want to do this if I can avoid it, but will if necessary.

Also, is the protection that I am currently running sufficient for security when playing online poker, and doing online banking?

Any feedback would be very helpful.