USB ports are unusable and system processes takes all the CPU

Here's my problem, the system processes takes all the CPU and USB ports are unusable; whenever I plug something into it.

I'm on HP Pavilion zv6279EA laptop that runs Windows XP SP3. In fact all the drivers are up to date and Windows too.

I, at first, thought of a hardware problem. So I tried to boot from a live CD that contains a version of Windows XP and the problem is the same. But, with a version of Linux live CD at hand, I do the test. Of course, impossible to see whether the "system processes" takes all the CPU but my USB mouse works like a miracle. I then decided to connect my external USB hard drive that also works perfectly.

Finally, I am in the dark because a total test tells me that hardware and other software.

Your system registry seems corrupted. Also could be virus activity. Scan your computer with an up-to-date antivirus. Also test your RAM if it is working properly.

Thanks Nihir but I have already tested with live CD's, which is independent of the system. I also tested my RAM and it is working properly.

I have also tried some other tests.

Format HDD. I tried to reinstall Windows XP Home SP2 without any drivers installed. What I noticed is that I lose the USB as soon as I come to the blue window to begin installing Windows. I tried various Windows Home CD's just to make sure the version I used was not corrupted and also a version of Windows XP Pro. I also tested with my Windows XP live CD with the empty HDD but the same result.

I tested with various versions of Linux but the USB works. Here is a list of versions that I tried:

Ubuntu 8.10 i386 (Live CD)
Kubuntu 8.10 i386 (Live CD)
Kubuntu 8.10 64bits (Live CD)
Backtrack 2 (Live CD)
Backtrack 3 (Live CD)

Could be heating issue? Just clean your heatsink and also the fans and see if it works. Also test your components like hard drive, graphic card, etc.