My winxp cpu monitor says High CPU Usage, what is wrong?

Hello,
I am using a Windows XP Professional operating system, Service Pack 3, 64 MB RAM and Pentium processor. My hard disk has 200 GB available disk space. Lately, I notice slow performance of my computer and when I checked my winxp cpu monitor, it says that my cpu usage is 100 %. I only have Chrome browser and Adobe Photoshop application opened but performance monitor shows 100% usage. What do you think is wrong and what possible solution for this problem?
