Ok so a bit of explanation. You have only one core, with hyper-threading, so it appears to the OS as if you have 2 cores, but in reality you don't. What the 2 virtual cores do is let's say your computer is processing some information. Now, suddenly, it can no longer do so because it is waiting for some other info to come from the cache. However, there is something that is of lower priority that is ready to go. It will process that information in the "2nd" core. In reality what really is happening is one core can juggle back and forth between the first most priority and the second most priority. You are not only using one core because you are at 50% CPU usage (however, you are using your one and only core). It' just that your CPU is just running at 50% capacity to read and write from the HDD. Now, I have no experience with Intel's ATOM processors, however 50% seems a little high looking at its specs. What I am more suspicious of is your HDD. If it's old, it could be becoming worn out and this could be early indications of a HDD failure. I would back your data up.
It has always been the case. I don't know exactly how hyperthreading technology works, but you can see that one virtual core is completely saturated while the other is ideling. Does it mean one virtual core has the ability to use 100% of the CPU cycles or does it mean that it only uses only 50%.
One virtual core is capable of using 100% of the CPU cycles. But due to the nature of you having 2 virtual cores, it most likely wont do that. Both of the virtual cores use the exact same physical lanes in the CPU. When a core is executing code, generally the CPU isn't going to need 100% of the cycles. However, if there is another bit of code that is waiting to be executed, the other virtual core can use all the CPU cycles that the first core is not. If the first core is using all 100% of the cycles, then the 2nd core has to wait.
TL;DR Yes, one virtual core can use 100% of the CPU cycles.
I found out that excessive CPU usage were interrupts from the ICH7M driver from Intel.
I uninstalled Intel's version, Windows installed Microsoft's one and now the Atom server can handle file transfer at the fastest hard drive at reads and it buffers in memory for writes, I will test the hard drive on mu laptop with a sata to esata cable for speed.