Thanks for letting me know about the laptop specs.
I noticed though the pops and cracks went down when i turned of yahoo messenger+increasing latency a bit when recording
Something tells me you got quite a bit of services going on in the background. YM and antivirus software, among other things, take up a lot of cpu headroom with their continuous monitoring. In most DAWs, we usually strip all the non-essential software and leave the least amount of services running to ensure that the DAW software is getting the lion's share of the cpu's resources. We even turn off screen saving and all power saving features (preventing the hard disk from spinning down), as well as disabling devices that aren't crucial to the DAW like printer ports, unused firewire ports, etc. It isn't uncommon to have less than 30 services running in a properly configured DAW.
During recording, we track with zero plugins as much as possible. That means no reverbs, compression or eq, relying on outboard gear to take up this requirement. This frees up the cpu to do the most important task, which is to record, and to allow us minimum latency times - noticeable latency is often detrimental to a good recording. Only during mixing, when all tracking is done, do we bump up latency to the highest levels and add as many plugins as our computer will handle.