Help! AMD Athlon XP Hiccups!

I just built a computer for my brother (which doesn't live with me). It's basically an Athlon XP + Win XP Pro system (full specs see below). Sometimes the machine runs smooth for a whole computing session, but sometimes, suddenly, without any obvious cause, the machine "hiccups" ("hiccup" will be defined below). Once it occured directly after I logged in, once it happened after I clicked file->save in notepad, once in the middle of a program installation, and also in other events that don't seem have a relation with each other. When the machine hiccups, here's what happens:

- When I open task manager to view the CPU usage graph (update speed set to high), the graph jumps up and down with a very short period (like 0% - 38% - 0% - 38% - 0% - ...) producing a sharp and edgy graph, like a seismograph recording an earthquake. This still happens even after I close all processes under my user name (except explorer and taskmgr). Although in the "performace" tab I can see the CPU usage graph jumping up and down, there doesn't seem to be a process in the "processes" tab that consumes 38% of CPU usage every now and then. The "processes" tab shows that the "system idle process" consumes 99% or 100% of the CPU usage, while other processes like "scvhost" is listed as consuming 0% of the CPU usage.
- The hard disk LED blinks on and off, with every "on" corresponding to the peak (38%) of the CPU usage graph.
- Something inside my CPU case makes a very faint "beep" noise, with every "beep" corresponding to the peak (38%) of the CPU usage graph. It's definitely not the PC Speaker making noise since I have none.
- The system halts/pauses periodically, with every pause corresponding to the peak (38%) of the CPU usage graph. If you move your mouse cursor round and round, the movement will be like this: moving - stopping - moving - stopping - moving - stopping - ...

With the periodical pauses (around every second), the system is clearly uncomfortable for any further use. The only solution (which I have found) is to restart the computer. It will be normal until the computer randomly hiccups again. PS: When I check the CPU temperature in the BIOS, it shows 39-40 degrees Celcius.

Here's the specs:

ECS KT600-A (VIA KT600 Chipset) (Sound, LAN, SATA RAID onboard)
AMD Athlon XP 2000+ FSB 133
Visipro PC2700 DDR SDRAM 512 MB
Pixelview GeForce4MX440 64 MB AGP 8X
Seagate Barracuda 7200.7 40 GB (Primary Master)
LG CDROM 52X (Primary Slave)
Panasonic FDD
350 W PSU
ATX Tower Case with 4 fans
Coolermaster CPU Cooler (forgot the type)

I disabled the SATA RAID controller from my BIOS.

Here's some of the softwares I installed:

Windows XP Professional + SP1
DirectX 9.0b
ForceWare 53.03
VIA 4in1 4.51v
Drivers for my LAN Card & Sound Card
NAV 2003 Professional

Some blunders when building the computer:

- The Coolermaster CPU cooler had a thermal paste on it. Accidentally I wiped around 1/4 of it. I didn't have any thermal paste so I proceeded using the "unperfect" cooler.
- I seemed to have streched the IDE interface cable when I was trying to unplug it from the hard disk (I was trying to move the hard disk to another slot in the CPU case).

So, do you guys have a word on this problem? Do you think this is a hardware or a software problem?

My brother was very excited when he was going to get a new computer. I really didn't want to give him a period of nightmare, frustation, and dissapointment. I need your help guys...

Thank you very much.

Agro Rachmatullah.

Spyware? Virus?

Sounds like a background process. Run a virus scan.