Newer Windows releases (so, Vista, 7, I'd assume 8) usually have automatic defragmentation switched on by default. They also have the defrag tool in there - they've sort of always had. Although fragmentation shouldn't a huge issue - at least I've never found it to be the major bottleneck when I've "fixed" other people's PCs. But it helps to do it anyway.
AV-wise, Avast!, Avira Antivir, AVG - the ones I've used (AVG I've always installed for others). There is also Microsoft Security Essentials which is free and supposed to be really good. Never used it but I trust the people who've told me that - relaying that information. Another point in favour of MSE is that it should be really light, too.
And this deserves a separate mention - Malwarebytes. This is the heavy photon cannon in security apps - I always scan with it when I have the tiniest suspicion of something fishy. And it's free. I can't recall, from the top of my head, if the free version could just be used as an antivirus (so, does it handle active scanning) or was it just the on demand thing - it's worth downloading in any case.
Anyway, what usually ends up being the problem - go to the Start menu, and type in msconfig - then go to the Startup tab, and turn off anything you don't think is essential. Don't worry, you can't actually break anything, you can safely turn off everything, but you might want some applications to start up. Certainly stop the obnoxious Adobe Reader, though. Then restart. Go into the system monitor and check how's the memory/CPU usage - if it's too high, try to locate what's taking up resources and probably stop and uninstall it, or at least try to stop the service.
Also, go and do a disk cleanup - remove the non essential files, hoping to regain as much space as possible, I'd suggest uninstalling unneeded programs and so on. What you're trying to achieve is get several gig free on C:\
