UPDATE: here is the official fix from McAfee: http://vil.nai.com/vil/5958_false.htm
McAfee corporate customers using Windows XP experienced massive problems today as an update to McAfee’s security suite deleted
svhost.exe—a very common Windows process—causing XP machines to reboot continuously.
McAfee has confirmed the problem and removed the faulty virus definition file from the update. Only McAfee’s corporate users were affected.
to fix it try this tip:
boot to safe mode, rename mcshield.exe, reboot, run Virus Console, pick Tools -> Rollback DAT, name back to mcshield, reboot