"CHKDSK is recovering lost files"
Something has happened with the file system on the hard disk. It is possible that this is due to a bad hard disk. I suggest that you start to backup all your important files, in case that the hard disk gets worse.
After that you can run chkdsk again, but this time using the "/f" parameter that will fix the found problems. See
http://support.micro....com/kb/315265/ section "How to run Chkdsk at the command prompt" 3. second item in the list. Hopefully Windows will start to work better after that.
But to be really sure that the hard disk doesn't need to be replaced, you should test the hard disk with its manufacturer's test program, which can be found on the manufacturer's web site. If you don't know who has manufactured the hard disk, look into the Device Manager to find the article number of the hard disk. It is usually easier to find the test program with the help of
http://www.tacktech....ay.cfm?ttid=287 than searching manufacturer's web site.