Garry's Mod causing network lag on Windows 7 32bit.

I’ve been running Windows Vista 32bit for quite a while now and it’s been pretty good to me, I had the PC as a Media Center and set up my Xbox 360 as an extender, so I can record/watch shows via the Xbox and be able to see it on the TV, rather than my computer monitor, this worked great on Vista - No issues there. (32bit vista) Then I install Windows 7, and with all my games it’s fine except garry’s mod. The moment I launch the game, using the extender becomes hell, using the Media Center menu, watching tv, fast forwarding, rewinding, the whole thing becomes extremely slow, like, unusable. There’s a network usage thing implemented into the Media Center which I brought up on the extender and with Garry’s Mod running I saw it dropping a heap and usually staying low. I don’t know why this happens because it’s fine on Vista, obviously 7 is a new OS so bugs would be common - But is there anything anyone can suggest to help fix this problem?

My specs are:

Windows 7 32bit.
4GB DDR3 RAM
Nvidia Geforce 9600 GT (512 MB)
Intel i5 750 CPU @ 2.67GHz

PS. I’ve got all the latest drivers for everything.

Have you got all the updates through Windows Update? There are some, not many.

Yeah man, got em all.