This is funny ... I have EXACTLY the same problem.
My "System" process keeps stepping from 0% to 13% CPU or from 16% to 33% CPU usage with every second ...
I tried disabling the "Local Area Connection" (im on DSL with a Router) and it (System) immediately stopped using CPU power !
I've tried using BlackViper's "optimizing" tips on Windows XP, and still didnt help ... only thing that does help, is if I stop using the Internet
Note! That I have the following installed and I have used them:
Norton Antivirus 2003
And they both come up empty. Im no computer illiterate, but I sure am baffled at this current problem I'm having
I have also tried updating all possible drivers ... even my CNet PRO200WL network card drivers!