Windows 7 hangs when installing ANYTHING

Installed windows 7 fresh couple months back and installing everything for the first time was a real drag. Installing anything from winrar to steam would cause most running windows to "not respond" until the install finished and would more often then not drop active skype calls. I figured it was just early bugs in the system but the problem still persists even with updated drivers for everything and making sure all windows updates were installed.
Any idea or a link if this has come up before to the tread would be nice seeing as i couldn't find anything searching the forum myself.

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