I'm using windows 7 and processor is 1.6 ghz dual core.my graphics card is nvidea xfx 8600. Recently the processor usage shows 100% even when I'm not running anything. As a result even the games which I play lags please help.

In the task manager, what process does it say is using the most? Do you have any anti-virus and/or anti-spyware? If so, what do you have and when did you last update and run a scan?

Run HijackThis and post the resulting log. HijackThis - Trend Micro USA (http://free.antivirus.com/hijackthis/)