I haven't tested any games as of yet, but removing avast free antivirus has solved the issues of my applications freezing and applications not opening. I have restarted the pc several times opened many applications and ran them and so far all is well, as for games i to hace watchdogs when i have time i will run the game and see if any issues come back. I have also posted the problem on the avast forum. I would love to know why hasn't avast fixed the issues with 2004?
I did what someone here suggested remove avast using the removal tool and then testing all my applications. Windows 2004 is not stable at all, it should not have been released.