General, the symptom you describe has been reported elsewhere as a worm that's infecting Microsoft systems lately. Let me find some specific links for you however, meanwhile:
1). Mcafee and Norton have updates to detect the worm, others may have it soon. Update and scan your system.
2). Microsoft had an update against the exploit available in July, download it to prevent further attacks.
[EDIT]
Ah yes, here's a slashdot story, full of technie info --
/. {link} someone mentions in the comments that the worm has problems infecting XP
[ August 12, 2003, 12:03: Message edited by: Arkcon ]