I'm a bit of a computer nerd, so here's what I have to say.
Windows' System restore is definitely not what will fix the computer. That is more for, say, you change a setting and your computer doesn't work properly. You do the system restore and it rolls it back to when it did work.
When you have viruses, spyware, adware, and all that junk, it really needs to be cleaned out. Also, there is no need to spend any money on doing this.
Do you run an antivirus on your computer? If you do, that's good. If you don't, the internet is way too hostile nowadays not to. A good free one is called AVG (free.avg.com). Download this program, scan your PC, let it delete what ever it finds.
Zone Alarm (zonealarm.com) Is a free firewall. This blocks hackers and whatnot from getting into your computer and putting viruses/trojans on it.
) is a great program that will get rid of all the adware and malware that your computer accumulates.
Ccleaner (ccleaner.com)This is used for system optimization and cleaning. It removes junk files from your PC that sometimes bog down the system and your hard drive. It can also clean your registry.
Another way to reduce stress on your system is to uninstall unnecessary programs (this includes toolbars and whatnot too). Also, turn off any programs that may run in the background that you don't need. Check out what programs start when windows starts. I personally hate it when programs have the option to start when windows is turned on. It really makes for a slow startup.
If none of these programs help out at all, it would be best to back up what you can and reinstall windows.
You mentioned earlier that you don't have any installation discs. That can be a problem if you want to completely reinstall windows. Do you still have the serial number sticker on your PC? If so, you may be able to get Microsoft to send you an installation disc for what ever version of Windows Xp you have(though that is unlikely).
What are the specifications on your system? Right click your "My Computer" Icon and click properties. It will bring up a system properties window. Go to the "General" tab. What does it say under the "Computer" section? RAM, CPU, etc etc.
If it's not an especially advanced system, I wouldn't recommend spending money on getting it repaired. Sometimes they just get too old to function. Especially if they were bottom of the line or midrange when they were new. My parent's computer can barely handle new programs because of its low specs. It's a great machine, its just becoming outdated. I would go out and get a 500 dollar laptop or something like that. Toshiba has really good, reliable, cheap laptops. If you get a new one, download the programs I recommended that way it stays safe.
If you need any help, I will be more than willing to try and help you out via the internet. Let me know.