So I fought this problem all day long. My Windows XP VMWare image was running like crap. I started to poke around. The first thing I did was to bring up the task manager. Sure enough, my virtual CPU was pegged at around 55-60% when the vm was doing nothing. This is not good!

But when I looked at the actual processes running in Task Manager, I could find nothing taking more than single digit percents of the cpu. Weird. I should have used Sysinternals Process Explorer in the first place instead of XP's crap tools. It told me that my Hardware Interrupts were running my system down to a crawl.