Painfully Slow

steve111,
One at a time:

Registry Mechanic downloaded automatically with DivX and found all sorts of things wrong but will not 'fix' anything without payment. Is this a worth while tool?

Can you suggest a registry cleaning tool?

I would NOT recommend using this tool. According to Microsoft experts, Registry Cleaning tools don't do any good, and if they are slightly imperfect, they can wreck your machine.
Don't ever use any kind of Registry Optimizer, Booster, Cleaner, etc.

Where is the setting to start DivX on startup? I want to make sure it is not turned on.

Hard to say for sure without a registry search. The easiest way to control Startups (enable/disable, etc.) is to use Winpatrol, a very useful program.
Instructions are here:
Install WinPatrol - Download and Install the Free WinPatrol, and view Instructions here: http://www.winpatrol.com/winpatrol.html
- WinPatrol is an active program that drops a "Scotty Dog" icon into the system tray (right click to check/change status), allows you to monitor/edit startups, services, Browser helpers, and prompts for permission if any program tries to change your system.

What is the DNS service?

It is a Service which catalogs website IP addresses to facilitate Internet Surfing speed. It is NOT NECESSARY for Windows operation, and most people don't need it.
If it is left running while a large HOSTS file is installed, bootups can take FOREVER and surfing will be painfully slow, since it will try to catalog all the entries in the HOSTS file.

I put the HOST files back where they were.

Good, I think. A good HOSTS file and instructions are available here: http://www.mvps.org/winhelp2002/hosts.htm

I did not install ie8.

That may not be the best decision. IE8 is a lot safer than IE7, and has improved compatibility with more websites.

My computer is back to it's old self again. Thank you for your help.

You are most Welcome !

askey127