Svchost.exe is a generic host process name for services that are run from dynamic-link libraries (DLLs). The Svchost.exe file is located in the %SystemRoot%\System32 folder. At startup, Svchost.exe checks the services portion of the registry to construct a list of services that it needs to load. There can be multiple instances of Svchost.exe running at the same time. Each Svchost.exe session can contain a grouping of services, so that separate services can be run depending on how and where Svchost.exe is started. This allows for better control and debugging.
I learned all that from a friend, he's pretty knowleable and if you ask him the right way....he'll answer any question.
Here he has his own site: http://google.com