Well i disabled the Windows Update service and rebooted - all seemed fine for a while. However the machine then began the memory nonsense once again, though i discovered something strange. I noticed a few of my USB devices weren't working and plugging them into various ports made no difference at all, then i got to my mouse/keyboard wireless receiver and unplugged it to swap something about and the memory plummeted from 3.3 GB to just over 1.4GB. The receiver refuses to work in any other port either. I figured it was drivers but i don't see how they'd cause the PC to run sluggishly.
I'm actually starting to wonder if this has been causing the issues in Windows 10 i was having. But i saw no memory problems there, sure it sat at around 2.2GB on 10 but i figured that was normal. But the sluggish/laggy symptoms are similar.