When installing and running apps and games I get a system slowdown.

Attached is the screen cap of the task manager showing 50% constant CPU usage and 0mb free physical memory while the memory meter shows between 680 and 720mb used.

Anyone else have this happening?

That's probably because you have SuperFetch enabled. This will load often used applications in memory in advance so they 'll start much faster if you really need them. However if an other application requires more memory, SuperFetch will automatically remove some pre-loaded applications from memory and the application you are running will run fine! After closing the application it will automatically fill the memory up untill it is full.

Example: I just shut down a Virtual Machine in VMWare Workstation. At the time I was running the Virtual Machine my physical memory was full for 80% and my Free Physical Memory was almost 0. After the shutdown of the virtual machine there was suddenly 1500MB of Free Physical Memory. While I was looking at the Task Manager the Free Physical Memory counter slowly decreased until it reached 0.

Unused memory is useless memory!

OK. That makes sense.
I have never worked with superfetch before, so I didn't know what to expect.

Thanks for clearing that up for me.