Hi! Hmmm.... you've only been running for 'x' number of months, and you also were a smoker until then, and are carrying some extra weight... and oh, by the way, you had knee issues due to overdoing it, so your actual running time was less than 'x' number of months. This one's easy: It's way too early to be worrying about speed. I practice ChiRunning, and one of their key concepts is: FORM first, then distance, THEN speed. You're trying to do #2 and #3 at the same time, with very little concern about #1, and ignoring also the fact that it takes a long time to build fitness, endurance and efficiency. You can't rush it, as you're already experiencing but aren't recognizing.
You're doing a lot of good things, but the reason you get burned out and your legs give out is that you're expecting to have mastered this by now but in reality you're not there yet, fitnesswise. For speedwork, I'd suggest doing shorter repeats, at a pretty hard but more sustainable pace than what you've been doing. I do speedwork at a track once a week with a group. We do lots of different workouts (some weeks might be 100- or 200m sprints; some weeks might be 800m repeats... etc.). Last week we spent the first 20 minutes running the straights pretty hard (I'd say 75% effort) and jogging the curves to recover. The goal was to be able to maintain the same pace on the straights for the whole 20 minutes. If we ran the first one at 90 or 100% effort, we'd never be able to maintain it for 20 minutes.
It takes time to learn what effort level you can maintain for what distance. Take it one step at a time, and learn to enjoy the process. Speed is the result of gradual effort. I'm still getting faster and it's been over 2 1/2 years, and I feel as though I'm nowhere near my best yet. But I also train for and run races more for fun than for competitive reasons. You say that 2:30 is "sooooo slow," but compared to what/whom? Keep in mind that we all have different abilities. You're probably slower than some people and faster than others -- we all are!
While I never hesitate to recommend ChiRunning to people, in your case I might suggest the book, "Run Less, Run Faster" (by the FIRST program in conjunction with Runner's World). It provides good, scientifically sound information about why long, slow runs, speedwork, and tempo runs all benefit your body in different ways, and how to go about it in a smart way that avoids overdoing it.