Check the bus master on your ide controller.
The "Current transfer mode" should be one of the DMA's.
Solution: Try reinstalling XP on clean install (eeek)or use "Intel Application Accelerator", I spent >4 hours last night with a minor disaster and I used it to get the CPU utilisation down. I had high CPU utilisation when heaps was happening on the desktop and it was caused by disk usage.
*Do not modify registry settings on XP unless you know a way to restore it.