I stopped the VM, changed number of cores back to 1, rebooted, and device manager shown the right driver for the single proc, and the CPU load at idle dropped back to 0. Hence, it appeas that VM BIOS misrepresents the assigned number of cores as the number of stand alone processors. It also probably misrepresents proc architecture when starting in Win7 64-bit host some VMs created in WinXP 32-bit host. It causes for some reason huge CPU overhead regardless of the VM booted or failed to boot until it is closed. Is that a VMWare WS BIOS bug or what?
Microsoft stated last month (November 2013) that the Internet Explorer updates are treated differently for all the other updates - which is causing the XP Update engine to run so slowly as to appear frozen. If the Update service detects you do not have the latest IE update that is currently available it starts to search the whole IE updates tree to see what you need - instead of just offering the current cumulative update for your system. But if you manually install the update yourself the Update service finds Internet Explorer is fully updated and doesn't search for any IE updates.