Yeah, 192MB of RAM is very low by today's standards. Upgrading will probably help, but it is hard to say how much. There are just so many factors when it comes to system performance.
As others pointed out, Windows systems typically do "slow down" over time due to adding software and hardware. I would stay away from registry cleaners. Removing registry entries will NOT speed up your computer (just like deleting files off your computer doesn't speed it up), and you run the risk of breaking things. Personally I don't trust those types of programs.
Reformatting will revert the system to a clean state, but you will need to be sure to back up your data first. You'll have to reinstall any programs you run, too. If you don't know how to reformat it, you probably shouldn't do it. It can be somewhat difficult to get all the hardware functioning again. If your system came with "Restore CDs" then you should reformat it using that method (assuming you decide to go that route). It will restore the system to the factory default state.
Other common reasons systems seem slow: age of system (processor technology), spyware, aggressive/inefficient antivirus software (what are you running?), hard drive starting to go bad, etc.
Honestly if your system is 5+ years old, forget about it. Don't waste your time. Just get a new system.