... doesn't System Idle Process running at high levels make my processor have a shorter life/ or could overheat? Is there a way to unistall the System Idle Process or disable it?
No, it won't shorten the life... and, no, it can't be removed or disabled. Anyway, there'd be no point in that. Look, the total of processes shown in Task Manager must add up to 100%. So, if the processes actually requiring CPU resources are basically idle, how is 100% going to be derived? By putting an item in there just to make the total equal 100%. It's just a mathematical thing, nothing more.
Your main problem is that you only have 128MB RAM. Double or quadruple that and you have a much better running computer. You also need to keep the system free of spyware, viruses, etc., and do periodically do some disk cleanup and defragment your hard drive, but, you really need more RAM.