Ok since your system came with Service Pack 2 installed the recovery disk should have it on it so there should be no problem using this disk for doing a system REPAIR. You do not want to do a system Recovery it puts your system back to day one and you loose your data.
First thing you do is back up all of your important data to a CD(s) or DVD.
Now that this is done if you are unsure about this and I think you should be. Actually you are.
I would suggest calling Acer's tech support and have them take you thru a SYSTEM REPAIR. This is so you will not have to reinstall all or any of your programs all you should have to do is go to Windows Update and see if you have to install any of the updates again.
The reason I am suggesting to go to Acer's tech support is because every computer manufacturer's software has little differences like sme you can do a repair and some you can not. Do not try this alone, you are asking for trouble.
When this is done hopefully this will fix a lot of your problems.
Let me know if this helps and if Acer can not help you with this I am including a link to go to only if Acer can not help you
How to Perform a Windows XP Repair Install = http://www.michaelstevenstech.com/XPrepairinstall.htm