Aspire 5102WMLi (5100) slowdown (gpu?)

So I have this old Acer 5102WMLi from 2006 with the 1.6 dual core Turion and ATI X1300. (big mistake, I am 100% Thinkpad for the rest of my long life), but it is used as a guest computer.

Problem is about 1 year ago it became very slow, regardless of OS (win xp, win 7, gnu/linux). The laptop gets very hot, and I don't remember this in the beginning of its life. I changed the thermal paste a few times, no help. The fan is working without a problem.

I can't watch 720p files any longer without lag. Before I was able to even watch 1080p. So I am suspecting the GPU. There have been constand freezes once a week or so of the OS, just a blank screen.

I am still mad for even considering anything other than a Thinkpad, but I was young then and wasn't thinking. I am so mad with this laptop that I am at the point of throwing it away. If there is anyway to make it faster or realize where the problem is, please share. I am not a "user", I do like computers, programming, hardware, but I can't tell what is wrong with this guy. Below are the specs:

Aspire 5100 series
model: BL51
Acer Aspire 5102WMLi
AMD Turion 1.6GHz 512cache L2
ATI X1100
2GB PC-4200 RAM
120GB 5400 RPM IDE
webcam doesn't work, connection cable gets disconnected constantly
DVD burner is pulled out, had connection issues
Winn 7 64bit

Cheers.