Can no longer multi-task.. Stuttering/Complete Slowdown/Fan having kittens.

Hi all.
I'm here to see if anyone can help with a problem I have on my Macbook. Let me try and explain as best I can.
Basically, whenever I have a couple of programs open, or if I visit a website heavy in content (ie: eBay compiling a search result, myspace, etc), or if I watch any form of video, or listen to any audio whilst doing anything else, after a while (in most cases under 10 seconds, sometimes up to 30 seconds), my Airport wireless indicator in the Menu Bar goes blank for a second, then comes back on, and from then on (until I close everything, and leave it for a minute), my Macbook slows to a crawl. The refresh rate for the screen is completely slow, and it's looks like an animation at 1 frame-per-second. My fans also make an extreme amount of noise, like it's about to take off.
If I'm listening to audio via iTunes, or a flash video in my browser, the way I know this is about to happen is that the audio starts stuttering, when the Airport indicator knocks itself out, it goes silent, and comes back when the Airport connection does. And from there, due to the slow refrsh rate, the audio is way out of sync with the video, and the video is has the '1 frame per second' look about it.
This problem first reared it's head about a year ago, when my Macbook was still packing it's factory RAM and HDD.
At first, I thought it was due to a lack of RAM, so I went from 1.25Gb to 2Gb. No change.
Then, I thought it was due to my HDD, as I was extremely low on space. I had less than 10Gb space for a good long time, so I thought it was down to not having enough virtual memory, so, I upgraded to a 320Gb Western Digital drive. Again, no change.
I've used an anti-virus program too, which has revealing nothing.
I ran the Hardware Test, thinking I may have bought a bad stick of RAM. Nope, they're both fine.
I've repaired the HDD via Disk Utility, and there was no problems with the HDD.
Tonight, after reading about on here, I reset the VRAM and PRAM, still no change.
Sigh.
I'm really beginning to lose it now, as it makes operating my beloved Macbook a real pain. I can never do more than two things at once, and have to do some severe 'tab-management' when I'm browsing. I've given up ever watching videos on it, as it just never works for longer than a minute.
So, does anyone have any idea what's up?
For the record, I am out of my Applecare subscription, so taking it in for repair is the last resort.
Can someone please help? If you need any other info whatsoever, please, let me know, I'll be more than happy to oblige.
Many thanks,
Gav.

What Lyssa said. And thing to look out for in Activity Monitor are Printing jobs. Unfinished printing jobs have been known to do what you describe. Also, with no programs running Activity Monitor should show no processes using more than single digit %CPU under All Processes. It sounds like you have something in the high or at least mid double digits going all the time.

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