DSL download speed rapidly fluctuates - please help

My download rate fluctuates very rapidly and is impacting my overall download speeds. For example, when downloading large file, the download will jump back and forth from 260kb to 120kb to 245kb to 122kb..etc. I use CTRL-ALT-DLT to look at the Network Performance tab and the line rapidly goes up and down the entire time (like a 9.0 earthquake on a Richter scale!). Here's are brief history of events:

1) I was on the 1.5 mb line and had no problems with steady download rate around 160 kb/sec.

2) I was unknowingly moved to the slower 768 kilobit line when I called to lower my phone bill. I went nuts trying to figure out why my download speeds dropped to 50 kb/sec. That's when I first noticed the fluctuations. During this time, I may have screwed something up when trying to figure out what the problem was.

3) After contacting Verizon, I am now on the 3mb dsl line. The fluctuations are still there. Downloads are slower than the 1.5 mb line. A neighbor has the same service and his download speed does not fluctuate.

Some specs:
XP Professional
Intel 3.2 ghz
Soyo motherboard with integrated Intel 10/100 network card.
160 meg HD, defragged, and plenty of space
2 gig RAM
Westel 2200 DSL Modem, which I've reset several times.

I've tried everything. If anyone can help out, please respond. Verizon customer support has been useless.

You my boy Blue! I ran Mcafee and Adaware the other night, but found nothing. After your suggestion, I used the online Fprot virus scan and found something ugly in my temporary internet files. After deleting it, I'm now downloading at 280 kb/sec, which matches my neighbor's speed.

Something weird though, now when I used various online speed test, I'm now averaging only 900 kbits/sec, where before I averaged about 1400 kbits/sec. To me, this doesn't make since because I'm not averaging over 130 kb/sec faster.

Either way, THANKS!

I ran the tweak tester and it had 3 recommendations. Using DrTCP I made the following changes:
-Tcp Receive from 8000 something to 20000 something (I can't remember the exact numbers; I'm not at my home PC)
- MTU from blank to 1500
-TTL from 32 to 64

After saving and restarting my computer, I ran DrTCP to confirm the changes were still there. I then used PcPitstop to test download speed and it was around 950 kbits/sec. I tested some downloads and was only averaging 130 kb/sec. Again, my network performance was rapidly going up and down; cursing ensued. I changed the DrTCP settings back to the defaults, restarted my PC and my download speed went back to 300 kb/sec, while PCstop still stated around 950 kbits/sec.

I'm going to do some more testing tonight. I'd like to read up on the tweaks a little more to understand what I'm doing.

Replace your network cables and test again. Sounds like a failing NIC or bad cables.