"When I started up my computer without a firewall on, I got some popup about an online casino, and needing to download some ActiveX thing? Not a good sign!"
That is called spyware! Ok! Get either adware or spybot from somewhere like cnet.com. Then install the program, update the program, and then run the program. After that is finished. Download an anti-virus program, update the program, and then run the program. Then find out if any spyware programs have been installed on your hard drive by opening control panel and then add/remove programs. Any programs that you did not install or do not recognize. Delete them. Download SP2 for XP and install it. This can be done via windows update. Then defrag!
Instead of using IE. You might want to use Mozilla.
(Calm down Blah. I know just a little about the I.T. industry. Just a little;-)