Just did a clean install of Windows XP Pro SP3 on an older HP laptop...it's got at least a 2GHz P4 and less than 512MB of RAM (will have to post back with the exact amount). Nevertheless, I was able to reduce memory usage by disabling non-critical services, and it runs great until the svchost process suddenly overloads the CPU and I have to terminate it in task manager. I understand svchost is a service host process, which leads me to wonder if tweaking the services is what created the problem in the first place. It's weird though, because I've done it on a dozen machines with great results and never once had this problem. Is there a way to see which particular service is causing this CPU overload, or a fix that I'm unaware of?

Svchostviewer, particularly when combined to Process Explorer (oe with Process Hacker) may be of great help. Do give it a try, then tell us whether it did help. I cannot do it right away, but I may be able to help you in determining which services are really relevant to your particular configuration and needs. Black Viper's page is great, and is very detailed, but is perforce somewhat generic and should be taken as a starting point only... much tweaking is in order to get really satisfactory results, IMO.

I read this last week but I didn't check when the patch was issued. I also don't know if it's relevant to your problem. At 1st sight, yes.