db server is too slow, real slow

I'm using
PostgreSQL 6.5.3 on i686-pc-linux-gnu.
I have a backup of our database (sql dump and large object)
backup.tar.bz2 with the size of 10121985.
We have users accessing our database from http and
odbc (ms excel).

Can someone pls tell how to solve this problem?

Thank you very much.
Sherwin

Here are the processes:
6:08pm  up 12 days, 23:39,  2 users,  load average: 12.99, 12.70, 11.29
74 processes: 57 sleeping, 17 running, 0 zombie, 0 stopped
CPU states: 24.9% user, 74.2% system,  0.0% nice,  0.7% idle
Mem:   387032K av,  184556K used,  202476K free,   48872K shrd,   49308K
buff
Swap:  265032K av,    5284K used,  259748K free                   73596K
cached

  PID USER     PRI  NI  SIZE  RSS SHARE STAT  LIB %CPU %MEM   TIME COMMAND
11345 postgres   9   0  2604 2544  1928 R       0 13.6  0.6   1:23
postmaster
11220 postgres   9   0  2604 2544  1924 R       0 13.4  0.6   3:10
postmaster
11213 postgres   7   0  2604 2544  1928 R       0 13.0  0.6   3:16
postmaster
10860 postgres   6   0  5552 5492  2068 R       0 12.8  1.4  14:48
postmaster
10862 postgres   8   0  2588 2528  1896 R       0 12.8  0.6  14:17
postmaster
10996 postgres   8   0  4404 4344  2072 R       0 12.8  1.1   8:28
postmaster
11168 postgres   6   0  3552 3492  2072 R       0 12.8  0.9   3:51
postmaster
10966 postgres   5   0  4652 4592  2064 R       0 12.6  1.1  10:04
postmaster
10957 postgres   7   0  4800 4740  2064 R       0 12.4  1.2  10:51
postmaster
10861 postgres   5   0  5396 5336  2064 R       0 12.2  1.3  14:15
postmaster
10867 postgres   9   0  5332 5272  2060 R       0 12.2  1.3  13:53
postmaster
10892 postgres   5   0  5084 5024  2060 R       0 11.8  1.2  12:33
postmaster
10995 postgres   5   0  4416 4356  2072 R       0 11.8  1.1   8:33
postmaster
11163 postgres   5   0  2612 2552  1924 R       0 11.4  0.6   4:01
postmaster
11170 postgres   5   0  2428 2368  1844 R       0 10.6  0.6   1:07
postmaster
10888 postgres   5   0  2584 2524  1896 R       0 10.2  0.6  12:47
postmaster