Windows 7 - Win7 very slow and getting worse, what to do??

I have Acer Aspire 5742 with win 7 64 bit with 6 GB RAM and i5 M480 processor. 640 GB HDD and about 120GB left free.
The computer is getting very slow, to the point that I am thinking to wipe everything out and install Win XP since I have PCs with Win XP few years old and they never got this bad but if I can improve Windows 7 on this PC and learn something in the process it would be great. I first noticed that Internet explorer is getting slow and freezes sometimes but now starting and running anything is slow, even stuff like 'My Computer' takes while to start up and is slow while running as well.
I have Avira Antivirus and Malware Bytes and scans are done on regular basis as well as defragmentation done once a week.
So far I have also tried to do selective boot up with only Microsoft services starting to see if any of the background programs causes the issues but it did not make any difference. I have also tried using Google Chrome to see if maybe this wold run faster but it is slow too.
Can anyone give me some starting points what to look for or maybe which software tools to use to give it better performance?
Thanks in advance for your time.

I wonder how your computer is slow on that configuration! Mine configuration is Core 2 Duo 2.20 Ghz, 320 GB hard disk (40 GB free) and 4 GB RAM. Windows 7 64 bit runs flawlessly on my lappy. I use firefox and it starts in no time! All apps runs like charm. I suggest you to reinstall Windows 7 and install the latest update from windows update.

Download TuneUp Utilities. It comes with 15 days trial period. It greatly optimizes the performance of the computer.

Try a clean install maybe? If possible run hard disk and ram diagnostic, just to be sure its not a hardwrae related issue.

My advice is forget tune-up utilities that may make registry changes you cannot easily reverse and may be unaware of; even those who recommend them are, ironically, asking for help on other threads in respect of undoing some of the changes made by such programs!

Try doing a Windows Repair Installation instead.

You are right. It messed up with my hibernation function. As far as I know it doesn't caused any registry issue or other harmful things in my lappy unless you do something wrong! And yeah you can revert the changes (if any) created by Tune-up utilities using tune-up rescue center function.

Can I still do windows repair installation even if my PC came preloaded widnows 7 and I dont have the resale win 7 cd? The instructions I have found talk about using win 7 resale cd

Do not use Tune Up Utilties or any other optimizing suites. These will ruin your OS.

Work through these troubleshooting steps with special attention to running a Clean Boot to turn off freeloaders on your RAM/CPU and Startup.

If these and other steps to Clean up factory bloatware don't help then consider a clean reinstall following these tips to get a perfect reinstall: Reinstalling Windows 7

Win7 Home Premium x64 SP1 English Official ISO download
Windows 7 USB-DVD Download Tool

I am not sure if anyone else mentioned this, but go to Command Prompt and run <sfc /scannow> This will find internal errors in the system. My system was behaving like this as you described, but I then ran this scan, and viola, it ran like a top again. Another pointer would be to update drivers through Acer's site.