Your PC should not max out at this kind of tasks, there is a good chance something is "broken". I have used way older and much weaker computers and they did not show this kind of behaviour. Download CPUID HWmonitor and CPU-Z to check the temperatures and Speeds on your board, maybe the CPU throttles down beacuse a fan has broken etc. there can be a lot of causes. Run virus tests, tests for trojan horses to exclude this kind of stuff though it does not sound likely. Then run memtest and chkdsk. If all of this does not reveal any cause have it checked by a computer store near by. Cheaper than buying a new one, and if you decide to buy a new one (don't upgrade) you will have one extra machine.
by finding out your motherboard and chipset etc. you can see what the best available cpu is for you to upgrade to. if you have a p4 I doubt your motherboard will support a core2duo. Perhaps a xeon would work on your board though and they are dual core and 64 bit capable.
Everything looks fine there except for the fact that your not running the latest service pack. Take a screenshot when it's peaked at 100%. Also - the advise to upgrade your hardware is like trying to upgrade a stagecoach with a Hemi. Don't waste your time or money. Like it said - it's software related. I don't see any antivirus so if you don't have any get some, run it. AVG is free and very good. Download Malwarebytes' Anti-Malware free version, run it. Download the latest service packs and updates, run em. Then defrag and then run checkdisk. After that is done post more hotties. Absolute worst case scenario is reloading the OS but thats probably not needed. Oh yeah - open her up and blow the dust out of the bitch while not running. Boot up while the cover is still off and make sure the fans are running good.
Appreciate all the infos. I'll be keeping a trained eye on the Task Manager for any perturbations. So far so good though.