I was having similar problems with XP Service Pak 2.  Frequently it would be up to 100%.  I don't know what was the cause but I finally updated to service pack 3 not too long ago and it is working much better, except that now I'm having trouble shutting down some of the time so I'm trying to figure that out. I've gotten a response to a post that indicated that it might be hardware (my Inspiron 5160 is coming up on 5 yrs old).

Which service pack are you using?  Run updates to update the critical stuff and probably basically everything. I didn't update to IE since I don't really use that much but have updated the rest.  My computer also was running really slowly which may well have been connected to the 100% CPU usage or close to it.

I'd grab a copy of psexec from here: http://technet.microsoft.com/en-us/sysinternals/bb896653.aspx

You may be able to see what is really using all that CPU time.  At 100% CPU time, your system will be running hot (temperature), so it would be good to get that CPU usage down.

I have service pack 3 installed. I have everything updated except for microsoft office xp.