Windows XP often freezes when clicking on icons and folders

When it happens, I cannot do ctrl+alt+delete but I can still move my mouse pointer. I've used registry cleaners, trendmicro adware and virus/malware scan and I've also cleaned up alot of my startup programs to only the necessary programs. I can browse on the internet for days and play games for hours without a hitch but when I click on random desktop icons or move things into folders, the screen just freezes while still allowing me to move my mouse.

Is there a way to solve this without reformatting? Also, system restore doesn't work for some reason. (as in, when I press next, nothing happens)