I am not fully understanding your troubles, so I will just throw out a couple of suggestions.
First of all, I am a firm believer in avoiding "writing zeroes" or reinstalling, for one reason, you are just basically installling Windows on top of the original install, so a reinstallation is a last resort in my opinion.
Have you tried to boot up in Safe mode? Safe mode boots only the items neccesary for Windows to function, and limits many third party software programs.
You say that it Hangs.....but you still have functionality? No "Blue Screen of Death"?
One of my older PC's uses a 1.8 GHz Celeron and had 256MB of RAM, and before I added RAM, it would take 5-6 minutes to boot, and if I tried to open anything before it was fully booted up, it would take even longer, and sometimes appear to stop, when actually it was just working overtime to load everything.
A possible solution could be to add RAM, that way your PC isn't constantly dipping into the virtual memory. It's a relatively cheap upgrade, and an even easier installation. Highly Recommended
You may want to check into Running Proccesses, chances are you may be loading up many programs on startup that you never use or need.
Sometimes people that find tweaking info on the web like the big debate on deleting the prefetch content have simialar issues, I learned by experience, and found that deleting all the content in that folder actually slows a PC down. I mention this just as a diagnosis, not a suggestion, meaning if you have deleted the prefetch files, that is another possible culprit for the rescource hogging.
There are so many possibilities, and there are several maintanance and setting mods that can increase the performance.
Empty Temporary Internet files.
Uninstall software you don't use
Don't use graphic intensive wallpaper and stick with a default screensaver
disable the fancy menu animations that are on by default
Defragment your drive weekly
Turn off Scheduled Tasks
If you have a decent memory, turn off automatic updates to programs, and update them manually
And the list goes on and on.........
Make sure not to click anything until the system is completely done booting. Pay attention to the tray on the right side of the taskbar(where the clock is) and see which icon appears last, it's not the most accurate method, but back in the day, I knew my PC was ready when the Printer icon appeared, it will differ from system to system, but again, it's just a simple gauge.
Hope this info helps,