Services.exe and Memory Leakage Problem

Hello all, my fellow Geeks. I consider myself fairly intelligent when it comes to computers, but this problem just will not let me fix it. The problem is actually 2 problems as I have noticed, but I believe they are one and the same, and I am here to get expert advice on how to fix it. FYI, I tend to talk forever, so I'll have a bit of a wall of text. I'll have a tldr on the bottom for you guys.

First of all, my computer is a beauty IMHO (I made it myself):
AMD Athlon 3800+ 64 X2 2.2 GHz
1 GB Dual Channel RAM
120 GB Hard Drive
512 MB Nvidia GeForce 7300 GT
Windows XP Pro SP 2

Here is the first problem. I had to reinstall Windows last December because of a little malfunction (I tend to purge my hard drive a lot, I'm an experimenter). Soon after the re-installation, I noticed that on start up, occasionally a message stating that "Services and Controller App has encountered and error and has to shut down." After either leaving this error here, or clicking on "Don't Send", my machine quickly grinds to a hault, but interestingly enough, the internet is the only thing to go down that fast. After thinking about it, it makes sense since Services.exe closed, so therefore only my services stopped, explorer is fine, programs still run, but certain things like opening new programs and accessing the internet stop. Anyway, this problem happens about 3/4 times I start up my computer now, whereas it only did it once in a while when I started. The other 1/4 of the time, this next problem occurs.

When my computer doesn't close services.exe, it runs like a beauty - very fast and very responsive; however, this does not last for long. After leaving my computer on for a day or two, things start to slow down, programs start to lag, the internet takes a while to refresh a page, and even the mouse starts to lag. I didn't really understand it at first, but I realized what is causing it. When I open Task Manager and look at the Commit Charge, out of the total 2200 ram available, 1800 of it or so is taken up after leaving my computer on for a couple days. When I count up a rough estimate of the processes memory usage, it comes up about 2 gigs short. I realized its a memory leak, and the program that seems to be causing it is services.exe. Normally services.exe tends to take up about 1-5 megs on normal machines. Right now, my services.exe is taking up 156 megs, and after looking at it for a bit, I realize that the memory usage of it is increasing constantly, never decreasing.

For those who can't read a wall of text, here is the tldr:
Services.exe closes itself most of the time on startup
The times it doesn't close itself, it leaks memory until all my ram is taken up.

I would really like to fix this problem, so far I have never had a problem last this long before. I would not like to purge my system again, and I am basically looking for an easy fix to this problem. I know there won't be one, but it just seems like my services.exe is corrupt or something. If windows has a patch to fix this, it would be great, but I would love to know how you guys think I could fix it.

 

Are you able to reinstall services.exe using your Windows XP disc? I realize your computer is custom-built without OEM features, but you might still be able to effect the repair in winRE

Chipper