I have recently installed Windows XP SP1 update and have found that the problem with avi files causing 100% cpu usage started happening all over again. I tried to do the original tweak shown on the site, but the registry key specified was already deleted. I searched around and found this tweak that fixes the problem, in both the original release of Windows XP and the SP1 update.
The ultimate solution
To correct the misbehavior in Windows XP, remove the following registry key.
"HKEY_LOCAL_MACHINE\SOFTWARE\Classes\CLSID{87D62D94-71B3-4b9a-9489-5FE6850DC73E}\InProcServer32"
This will prevent Explorer from loading shmedia.dll in response to file property queries on these files. This will not effect your ability to play files, get file attributes, or even view thumbnails. I really think Microsoft is trying to make sure people only use mpeg
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