Originally Posted by jeller
There should be multiple instances of svchost.exe running at once. Don't worry about that process.
For future reference, just google "what is processname.exe" and it'll usually give you an answer.
There has been trojans in the past named svchost.exe...
Though, they would likely be picked up by a virus scan.
Do some of the Windows XP optimizing things, like disabling file indexing.
Run CCleaner, Ad-Aware, and Spybot S&D. Then run HijackThis and post the log in the HijackThis forum and see if they can spot anything out of place.