Shut off unnecessary services.
Here's a short description of services and what they do and which ones are safe to disable or set to manual.
You can access the services menu from Control Panel>Administrative Tools>Services.
Alerter (DISABLE) -Notifies users of administrative alerts Not really required under normal circumstances.
Application Layer Gateway Service (MANUAL) -Used for Assign Publish and Remove software services. Some people "may" need this. I have it disabled, and I'm doing fine. You should set this to manual, and if an application needs this service, it will start, otherwise it will not.
Automatic Updates (DISABLE) -Used to check up to see if there is any critical or otherwise updates available for download. You can go to windowsupdate.microsoft.com to update, and I would rather do that!
Background Intelligent Transfer Service (MANUAL) -Used to transfer asynchronous data via http1.1 servers. Who need's it? (UPDATE)More people than you know! I got an email from Crystal, the person I told you about a few mins ago, and she say's disabling the Background Intelligent Transfer Service is not necessarily wise as more programs than you realize actually use this service. As well, RPC Locator That is important.
ClipBook (DISABLE) -Used to store information (cut/paste) and share it with other computers.
COM+ Event System (DISABLE) -I am unaware of any application that uses COM+ but if set to Manual, many services report to it, so it will start anyway.
COM+ System Application (DISABLE) -Same as COM+ Event System
Computer Browser (DISABLE) -Maintains a listing of computers located on the network This service is not needed on a standalone system. If you go to a lan party or you share files on your home network you might want to turn this on.
Cryptographic Services (Automatic) -Basicly it confirms signatures of Windows files You may always get a dialog box complaining about uncertified drivers if this is disabled. Keep it enabled in order to download updates from windowsupdate.microsoft.com
DHCP Client (DISABLE) -Receives a Dynamic IP address from your DHCP server. If you have a static ip (An ip that doesn't change) then you could turn this service off. If your on 56k or have a dynamic ip, leave it as it is.
Distributed Link Tracking Client (DISABLE) -Maintains links with NTFS files within your computer or across a domain. I don't think many people would have a use for this.
Distributed Transaction Coordinator (DISABLE) -Takes care of transactions that span multiple resources. Don't ask, because I don't know

I have had it disabled without any problems though.
DNS Client (Automatic) -Resolves DNS names and Active Directory domain controller functions. I have found that surfing the web is slower with this disabled. ie. takes longer to look up dns names with this off. It might just be my computer, you can test it for yourself if you would like.
Error Reporting Service (DISABLE) -Phone homes to Microsoft when application errors occurs. I think it's a security and privacy breach. Disable this!
Event Log (Automatic) -This allows Event Log messages from applications to be viewed in Event Viewer. You should keep this enabled, I have found that the system act's weird when it's disabled. I have also gotten an email from a user saying this: "Service is need for diskeeper defrag and remote access, auto connection manager plus remote access connection manager is needed for Pal a compuserve connection to work". Thanks for input!
Fast User Switching Compatibility (Automatic) -What? yeah.. I have it enabled because I like my hacked logon screen

If you disable this, it takes you back to the old Windows 2000 logon screen
Fax Service (DISABLE) -Not installed by default, so don't enable it leave it disabled.
FTP Publishing Service (DISABLE) -Used to provide a FTP server on your network.
Help and Support (DISABLE) -ah I hate this one..it uses a lot of resources.. disable it! Also, it will enable itself if you click on Help in the start menu or if you hit F1, so watch it.
Human Interface Device Access (DISABLE) -If some of your peripherals stop working, set this to automatic.
IIS Admin (DISABLE) -Usually used in conjunction with local web site or FTP servers.
IMAPI CD-Burning COM Service (DISABLE) -Used for the Built-in windows xp CD burn capability. I rather use Nero Burning
rom.
Indexing Service (DISABLE) -This is a no no! This thing is a resource hog, and will slow your pc a lot.
Internet Connection Firewall and Internet Connection Sharing (MANUAL) -If your sharing your Internet access with other users on your network, leave this alone. If not, set it to manual.
IPSEC Services (DISABLE) -The average user doesn't need this enabled, but if you are paranoid about security, enable this feature.
Logical Disk Manager (DISABLE) -Vital to run the Disk Management MMC console for dynamic volumes.
Logical Disk Manager Administrative Service (DISABLE) -Same as above
Message Queuing (DISABLE) -Not installed, leave it like that, or disable it.
Message Queuing Triggers (DISABLE) -Not installed, leave it like that, or disable it.
Messenger (DISABLE) -Sends messages between clients and servers.
MS Software Shadow Copy Provider (DISABLE) -Used in conjunction with the Volume Shadow Copy Service.
Net Login (DISABLE) -Used for logging onto a Domain Controller.
NetMeeting Remote Desktop Sharing (DISABLE) -Bad Bad Bad! Big security risk if you ask me!
Network Connections (Automatic) -My network setup requires it. Set it to disabled, and if your internet works leave it, if not enable it.
Network DDE (DISABLE) -Unless you use Clipbook service, don't enable it
Network DDE DSDM (DISABLE) -Same as above
Network Location Awareness (NLA) (MANUAL) -Required for use with the Internet Connection Sharing Service.
NT LM Security Support Provider (DISABLE) -Not needed unless you are running Message Queuing or Telnet server