Running a Dell E310, Windows XP, 160 G hard drive, external 500 G My Book, Xp partition is 117 G of 160, only 55% full.

When running Chuzzle, Ma Jong, mmorpg's, email, basically anything every 10 - 30 minutes it freezes/won't respond to mouse or keyboard input, won't update screen, just nothing for about 2 - 5 seconds; then goes back to normal. Task manager shows (sometimes) 95-100% cpu use, doesn't however keep a record of what was using so much cpu, then drops back to 2-10% cpu use.

Running AVG, Spybot Search and Destroy, WinPatrol and Ad Aware so don't "think" its spyware or virus/worm etc.

Any suggestions to procede in finding the cause?

not sure what it can be but in device manager ,go to View ,select columns and check off peak memory usage ,this will show what they all maxed out at !might give some clue as to whats doing it .
also you could check event viewer for errors ,
type this into start/"run"

How much ram is in your system...

Usually spybot search and destroy teatimer will cause this, also microsoft search indexer will do this on systems with low RAM.

Try to find out what process is the resource hungry that loads the machine...

Also, just to make sure it's not malware, unplug the machine from your Internet connection and work that way normally for a few hours as a test. If the problem seems to go away, you can suspect that you've been pwned. All the virus / spyware / trojan checker companies play catchup with the guys who write those things, so it could be one they aren't yet detecting.