First of all, the file svchost.exe in the System32 foder(under Win2000/xp) is a systemfile which is needed. If you want us to take a closer look at your “Problem” please post a Hijackthislog.
You can download the programm here: http://mjc1.com/mirror/hjt/
Download, unzip and start the Exefile. Press “scan”, “save log”, after saving it, post the content(via copy/paste) of the Editor-windows, which will appear.