when i view the proccess running through the wndows task manager i see there are 7 processes names svchost.exe running , 5 under the user name SYSTEM two under the NETWORK SERVICE and one under LOCAL SERVICE. is this unusual ??

Nope. It's not unusual to have multiple svchost running.

You posed a very good question. A question that I myself have once pondered upon but never checked. Thanks to you, I found a pretty good link that would explain it in more detail. Microsoft's support site was just sooooooo "informative" (sarcasm).

What is svchost.exe And Why Is It Running? :: the How-To Geek

It is common to have 4 - 6 instances of svchost running. I don't recall 7 on a XP box before so that seems high. In that link above Process Explorer is very good at telling you what is using each instance.

Hmm. I have 7 instances as well... I should probably check it.

I would, just to be safe. If you have several external devices as well as several programs that start at boot, they all could be legitimate. But... (dramatic pause to raise suspence)..., I would wonder if there was something seldom used, or is perhaps redundant, that could be more of an "on-demand" application, instead of loading at boot and using resources all the time - probably not a problem if running with 2Gb of RAM or more.

While not all Services are essential for all users, only the computer's main user can determine which are required to have the system behave as he/she wants.

Changing Services settings without completely understanding the consequences can often result in fairly serious difficulties. Before modifying Services (services.msc) I suggest a through exploration of
The Elder Geek: Services Guide for Windows XP
and Black Viper: Windows XP x86 (32-bit) Service Pack 3 Service Configurations by Black Viper
(BV SP2: Windows XP x86 (32-bit) Service Pack 2 Service Configurations by Black Viper)

The Elder Geek is a bit more conservative, Black Viper more aggressive.
It is often suggested to set all Services to default before making changes, and then to make them one-at-a-time so as to understand "What happened?"

When a Service is disabled, it simply will not run, and any system functions that depend on it will not work either. When a Service is set to manual, the system can start it if required but it will not auto-start with Windows and run continuously. This makes manual the preferred setting for those Services which a user wants to control.

Automatic Services are those which Windows will start by itself at each boot anyway. Setting them to Automatic reduces the burden on the system at boot and ensures that the Service is running when needed. In fact, some Services require an automatic setting to function properly- Automatic Updates for example.

Above mentioned Process Explorer is an essential tool in Services management, allowing a full description of the Services hosted by each instance of svchost.