Well...I see that you think that you know what's wrong...and why...let's see if we can determine how accurate you are.
Why have you removed your AV protection? Did it not occur to you that this is not necessarily a wise move?
<<WMP cannot play the file. The player might not support the file type or might not support the codec that was used to compress the file">>
That message typically appears...because the system does not contain the codecs necessary to play such files on WMP. Codecs to overcome such are available freely on the Web...I used the K-Lite Code Pack, Full
to overcome this, but there are many codec packages available that do the job.
<<I also have tried to download Adobe Flash from their website but this message appears...>>
Lots of users have problems with downloading/installing both Flash and Java, for various reasons.http://get.adobe.com/flashplayer/
I just downloaded/installed the latest version.
<<The PC is also slow, jerky, mouse unresponsive, selects text at random, will not select a text entry field. This has been since installing BT as a "service provider".>>
Are you saying that a simple switch of ISP...brought these problems to your system? I would be more inclined to assert/suspect malware of some form, if not other causes/coincidences.
Slow Computer-browser Check Here First; It May Not Be Malware - http://www.bleepingcomputer.com/forums/topic87058.html
What version of IE is installed?
How much RAM installed?
How large is C: partition...how much free space on it right now?