i was able to do a fresh install of win7 and it works fine, it says that i have 4GB ram and 500GB hdisk then suddenly i got these not responding apps like IE, installing drivers and stuff. which I think wouldnt eat that much ram. so i concluded that its either the ram or hdisk.
Try removing one of the sticks of ram that you installed and see if it improves. Chances are that if it works fine, it has something to do with the max ram limit being exceeded, which is throwing something off on the motherboard,