Update:
I uninstalled the last couple of things that I had installed recently (Webcam driver and Skype), although the laptop had been running fine for a couple of weeks since installation. This made no difference.
I then found that plugging a USB mouse in allowed me to move the mouse pointer about, so although the CPU was still running around 100% I was able to investigate without being in Safe Mode. The first thing I tried was updating the mousepad driver (and rebooting), but this made no difference to the CPU usage and the mousepad still didn't work.
However at the next reboot everything is miraculously back to normal! The CPU is now back to 0 or a low number, the mousepad is working and the keyboard is back to normal. My best guess is that the problem was related to the mousepad driver, but for some reason required more than 1 reboot to fix.
Another possibility was some sort of scan or virus running that has now finished, but I guess I'll never know. I'll run Hijackthis as advised by BOAC and see if it turns up anything.
Thanks for the replies,
Vindaloo