suspicious activity on Asus M70V (running Vista)

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Does anyone recognise these symptoms please? I know what each of the
mean and have ruled out each in turn

Firstly, VERY sluggish activity on laptop, getting slightly worse over
time. Every action takes an age to execute. Ran Spybot and there is no
malware on the computer or background activity to interfere with
whatever I am doing.  I have had it this bad before and it always
meant that the hard drive was on the way out.

Seatools runs OK! Windows Defender runs OK

Sudden change of desktop wallpaper to Asus default for no apparent
reason, as if there isn't enough memory to run a wallpaper. Memory
seems OK.  As if something has taken over my computer. Got worried
about virus so ran Sophos from av-cls.  (curiously Kaspersky updates
all its files and then asks if I want to run, run on a particular
folder or drive and then cuts straight back to the multi-AV Start
Menu)  Sophos shows possibility of Zip bomb (and some innocuous trojan
which apparently is only seen by Sophos) but eventually deletes it/
them. Then runs and runs to no particular completion.  Trend Micro
Sysclean (obviously suitably updated) runs OK and shows no threats.

Windows Defender updates its files again and shows no threats again

Meanwhile a major symptom is that internet connectivity suddenly takes
a curious turn: First the network connection setup starts giving out
erroneous error messages saying that the WEP key doesn't match what is
on my router (which it does). Then sensitivity fails almost completely
and wont connect in my living room to what it itself recognises as a
two or three bar signal.   Moving closer to the router corrects this
but still, I cant understand why the CONNECTING screen runs and runs
more than 20 ft from the router and then Windows starts to give an
error message telling me that it seems to be taking too long to
connect: Prior to telling me that it cant connect at all. (Yes, I will
check that the antennae are still connected but don't hold out much
hope of this being the problem)

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