Talk about a pain in the ass. So far the only way to fix the CPU 100% SVCHOST is turn off automatic updates in XP SP3. You need to turn the services off.
IN THE RUN BOX type services.msc
Look for Automatic Updates. Drop Down Box to disabled.
You also have to disable it on the profile1.
Second tab click on whatever profile you see and disable it.
This does work. This is not really a true fix, but a bandaid that works. XP will be fine and the user will be running again.
Hope this helps someone.