IIS using 99 CPU and large memory usage even with SP2 installed

[Tom]

Hello,
I am having major issues with my IIS and SMTP services. IIS We are
running Windows 2003 Server with SP2 and Exchange Server 2003. Exchange is
just running on our internal network and not used for external email. The
server runs great until I start the SMTP services. Then the CPU usage
bounces around from 5 to 99 percent and the memory usage goes through the
roof, which bogs down the rest of the server. It won't let me stop the SMTP
service and I end up rebooting the server and setting the SMTP service to
manual so that it will stop. We have all Windows updates run and Antivirus
updated and scanned. Any help you could provide will be greatly appreciated.
We also have 1.5GB of RAM.
Thanks,
Tom