Well first off, I have heard of many problems with WinMe. I have had the opportunity to get and use it, but never have becuase of the horror storys I hear about it.
On the flip side some people have absolutely zero problems with it, so I dunno.
The restore seems to be the best option. Hopefully you have a burner or something to back up your files/pics/whatever to a cd-rom, as when you do the restore its likely to wipe everything out.
If you dont want to restore, I would do a couple of things, in this order:
1. Delete Temporary Internet Files (from that file folder named that)
2. Delete Temp files (again from the file folder named that)
3. Delete all Cookies (hopefully you rememeber passwords to all wedsites that may auto logon for you)
4. Delete all Internet History
5. Look in startup folder under the start button/program files and see whats in there...shouldn't be much, in fact I prefer nothing unless you have like a IM program that autoruns when you start up. Delete any other nonsense out of there.
6. Empty recycle bin
7. Use Windows update and download and install all the updates out there...especially the critical ones. However you dont need all the language versions.
8. Reboot the machine. You might have to do this after some windows updates, but reboot again after all of them are installed.
9. Defrag the computer and reboot.
10. Send to me and I'll have a look at it.
Oh ya, spybot search and destroy might help too...you could try downloading and installing that (its free) after steps 1 through 9.