Thanks malebolgia for this one. WINDOWS UPDATE USERS and prudent sys admins might have installed the latest Windows patch without a thought. That might not have been such a good idea. The patch is meant to fix a hole in Windows Messaging but can end up causing a severe performance degradation.
To remove the patch: Start > Control Panel > Add/Remove Programs > Find Windows XP Hotfix (SP2) Q811493 > Click Remove > ignore Warning > Reboot by clicking Finish
The patch will be listed again on Windows Update when you next check for updates.
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News source: The Inquirer
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