Ain't no way you hit 32 mph on the flats with knobbies. In fact, an average speed of 25 mph is FAST - even for a roadie paceline. I'm not putting you down, I just think that you might need to recalibrate the ol' internal speedometer
. I run at about 15 mph on my touring bike with 1 1/4 inch tires and a less upright riding position. Even 5 mph faster is much harder work.
Anyway, I'll reiterate what others said about the brake problem - make sure that your brakes are well-adjusted, and that your wheel is true. If it isn't, have your LBS true it for you (or learn how to do it yourself).
The other thing that bears repeating is slick tires for the road. They are noticeably more efficient - you'll be hitting 40 mph with these babies on your bike
. Faster with less effort = good. If you're in reasonable shape, you can maintain around 12 mph pretty much indefinitely. It sounds slow, but it eats up the miles. A nice side benefit is that with slick tires you lose that annoying buzzing sound.
Also, if anyone tells you that it isn't worth upgrading that bike, don't listen! That looks like a pretty solid aluminum frame there, judging by the tube diameters. A lot of the cost of a bike is in the components; believe me, I've been there. You can afford to upgrade a piece at a time. Heck, if you wanted to, you could totally re-equip that bike to be a road bike. Of course, I wouldn't go that far before just buying an actual road bike, but you do have a lot of flexibility. Have fun!