I noticed that csrss.exe was at 100% when I tried to load Flash CS3, Acrobat Reader 8 and get into Google News. The only Microsoft resolution (http://support.microsoft.com/kb/555021) suggests recreating your user profile - don't!
I couldn't find any other posts that had a solution to my problem, but I considered it could be font based as Flash CS3 freezes when "Initializing fonts".
In my system.ini file I noticed a list of .FON commands:
I removed these and now everything works fine!
I discovered that this is what Windows uses to emulate fonts in EGA and CGA monitors (it's 2007 for godssake!). So far, I've had no ill effects from removing them from my system.ini file.