I had a similar problem. Ordinary computer, OS=XP Pro, fresh install.
Noticed it seemed very slow. Checked with Task Manager, and svchost.exe was running 100% cpu - all the time.
It turns out, most of the stuff provided by Microsoft are in the form of .dll's, so they can't execute all by themselves. svchost.exe is a small executable to run the appropriate .dll. You will probably have several instances of svchost running.
I killed the task and the computer immediately speeded up to normal. It turned out, that particular svchost was running the firewall. Since I felt a little "naked" without a firewall, I loaded ZoneAlarm, which is executable all on its own. So that problem was solved.
I usually run Task Manager and minimize it, which leaves a little window on the task bar showing cpu usage. When it turns all green, you know something is hogging the processor.