The problem is autoupdate but.....
Let me guess, using Office 2003?
I have the same problem since i went back from the Office 2007 beta to Office 2003 (auto update searches updates for Windows and Office).
I myself have turned off auto update for now and went back to checkin for updates manually again.
Update on the issue
Also have a look at this hotfix:
FIX: When you run Windows Update to scan for updates that use Windows Installer, including Office updates, CPU utilization may reach 100 percent for prolonged periods
Maybe you've applied that one before but it has been replaced by a newer version (
927891), so give it another go (it seems to have fixed it for me)
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