Bandwidth usage lags computer - REDUX

I have the EXACT same problem as a prevous post that had no followup here:
http://www.vistax64.com/network-internet/173125-bandwidth-usage-lags-computer.html

Started a few days ago out of no where...

Although I register a fair bit of hard drive activity as well as the erratic cpu usage.

Its so bad that when the net is being used I can't listen to music because the lags causes it to become choppy.

Running a scan now with AVAST! and Downloaded the lastest batch of windows updates will report on success (or failure).

Anyone else had/fixed this problem?

Scans have found nothing, I'm thinking a format might be the only option...