If it was working before and IE8 is the only 'change' it could very well be causing it. Might need to see a Dxdiag report but I'd go through the usual things first. Check CPU usage, should heartbeat from 0 to 2% regularly, processes running, autoupdaters off, and so on and so on.
[ Assuming you are using WinXP and not Vista. ]
It might also be related to the same reason you were having trouble surfing the net too.
Having trouble imagining the 30 kills part.