This issue sounds familiar, I know I've seen it mentioned somewhere... could possibly be caused by and old version of xLabel I think, but I'm not sure. I'll look into it.

edit: From the xLabel 3.5.1 changelog:

Added: [cpu] should now work without pdh.dll, which should fix the -1% CPU on some systems.

In other words, upgrading to a more recent version of xLabel ought to solve it.