When I updated to SP3 on XP, I immediately noticed an improvement in performance. Everything seemed to run much smoother. I have never heard anyone say it slowed things down.

The redistributable failure in your error log is referring to the C++ files that are needed for Avast to function correctly. Avast is supposed to install them as part of the process but I know from experience that it doesn’t always work right. In your case it looks like they are failing to install correctly.

22.09.2011 19:57:40 system: Executing:C:\Program Files\AVAST Software\Avast\vcredist_x86_SP1.exe /q 22.09.2011 19:57:52 system: Executed:C:\Program Files\AVAST Software\Avast\vcredist_x86_SP1.exe /q 22.09.2011 19:57:52 system: ERROR: VC redistributable check failed, error 0x000036B1

You’re much better off if both the C++2005 and 2008 files are installed and then updated through Windows Update before you install Avast. You can download and install them from the Microsoft Download center and I would suggest doing that. I had to do it on the Vista machine here before Avast would work right.