What are your PC specs? Would you be able to upgrade to Windows 7 or purchase the newly released Windows 8? Reason being - as you may be aware - Windows XP is an ancient OS in modern terms, and I'd suggest looking at a better and more secure OS (by default).
Below are my suggestions, took me a while (30 minutes :blush: ) so some may be repeated from users above my post.
Other than that glad to see your config, hope this is of some help!
Run Windows Update to download and install Service Pack 3 or visit below to download manually;
The IE browser still needs to be updated, even if you use Firefox. Check to make sure you have Internet Explorer 8 installed (or via Windows Update);
Install Secunia PSI 3.0 to eradicate (or to reduce) any programs that may lead to infections through vulnerabilities. Some program updates may require user interaction;
Surf safely within the boundaries of Sandboxie, increasing security and reducing infections;
Don't like Sandboxie? Try the alternate, Bufferzone Pro. It contains a few more features and a Firewall compared to Sandboxie, but both isolate any unwanted changes and can be easily undone;
I'd advise uninstalling Spybot Search & Destroy, since it's practically useless against today's malware. Replace with a secondary on-demand scanner (no need to activate license);