I'd have to agree that RAM is the problem. You have so little that it has to write to the hard drive (in a process referred to as virtual memory and called the page file) information that would otherwise be stored to RAM. RAM is obviously a lot faster than your hard drive, so having more would most likely help.
Make sure that you get the right speed and size of RAM. You want to match the speed of the existing stick, and you want to make sure that the new one is within the limits of the motherboard's per-slot memory size. Look at the manual for your motherboard (or computer if it's something like a Dell/Compaq/HP/etc.), or, if you have one of these name-brand computers, you can generally find recommendations online or at a retailer.
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