We are seeing serious issues (high CPU, high memory usage) with the SVCHOST.EXE process on WSUS Windows XP managed workstations.  This may happen on 2000 or non-WSUS stations as well.
 
The following URL explains one of the symptoms: http://support.microsoft.com/kb/916089
 
This has dramatically impacted some workstations and servers.  Microsoft PSS has a quick fix which you can call in and get.  
 
But we have found a cleaner way and it appears to work.  YMMV.  It may also be a good solution if Windows/Microsoft Update is acting goofy.
 
1. Disable the "Automatic Updates" service
2. Disable the "Background Intelligent Transfer Service’ service
3. Reboot the workstation/server
4. Delete all files from the "%WINDIR%\SoftwareDistribution" folder (ex. C:\Windows\SoftwareDistribution).
5. Change the "Automatic Updates" service to Automatic startup
6. Change the "Background Intelligent Transfer Service" service to Manual startup
7. Either run Windows/Microsoft Update again (for non-WSUS managed stations), or

7. Remove the computer from WSUS.
8. Enter "WUAUCLT.EXE /DETECTNOW" from the command prompt or Run.  The WUAUCLT.EXE might take a few minutes or hours to start communicating with WSUS (depending on how your WSUS is setup). 

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