Macbook Air gets really sluggish and incredibly slow

Hi, my Macbook Air bought last December (2008) becomes very sluggish, as in really slow after some very light usage.

It usually happens when I'm watching a YouTube video (or any .flv video) in either Firefox or Safari or if I'm browsing for a long period. It's not just the browser that becomes slow, it's the whole computer. The video cannot be watched and it becomes all jittery. Switching between tabs takes a while, and even scrolling down a page has a delay. Typing also has a delay, and the whole experience is just horrible. Moving along the dock, the icons magnify at irregular intervals and launching an application takes extremely long, even the System Preferences Pane.

The happens whether I have three or four applications open with twenty tabs in Firefox or with just my browser and only two tabs. Along with the sluggishness, the fan starts very loud and to get rid of the slow behavior and loud fan noise (the noise wouldn't bother me, but I associate it with slow, slow problems) I have to flip the lid down and leave it go to sleep. When I return, watching the video is ok for a while, but if I have to pause it to do something else or if I do something other than view light web pages like change tabs, the computer slows again.

It's a Macbook Air 1,1 with a 1.6GHz processor and 2GB of ram. I have 50GB of the 73GB of hard drive space empty.

I recently updated it and left if off for a couple of days, but this hasn't helped.

There are only two applications which open when I log-in also, so I have no idea what the **** the problem could be.

Any ideas, and what could I do to fix it?

Your help is EXTREMELY appreciated by this very frustrated Air owner!

Thanks,
Ed.