Spoolsv.exe - Application error

Boot to Safe Mode (not the one with networking).
Open My Computer and navigate to
C:\Windows\System32\Spool\Printers.
In that directory, delete any files that end in .SPL, .SHD or .TMP.
Reboot.
If the situation continues, boot to Safe Mode again and perform a XP System Restore to a date prior to when the situation started occurring.
Start - All Programs - Accessories - System Tools - System Restore.

After the System Restore, a full virus scan would also be a good idea.

using AVG (http://tinyurl.com/fky54) or your own anti-virus program, with the latest virus definitions, perform a full system scan in Safe Mode. You can also use McAfee Stinger (http://tinyurl.com/1x4v).

Here is a free on-line scan offered by BitDefender: http://tinyurl.com/aauh5 .
And another by TrendMicro: http://tinyurl.com/2xis .

I would also use this tool: RootKitRevealer (http://tinyurl.com/y3hgq9).

Here is a link to AVG's free RootKit detector and Remover:
http://tinyurl.com/35jq2t

If you determine that there is indeed a virus involved,
I recommend you go here:
http://tinyurl.com/2yyc8q .
TrendMicro has always been my favorite source for virus information and removal.

My second choice would be BitDefender. Here's a link to their extensive library of free removal tools:
http://tinyurl.com/y6opnp

Please let me know what ultimately resolves the issue.
Good Luck

disable all the third party services running on the server and then check if you are getting the same error or not? exclude spooler folder from antivirus scan.
check the latest version of spoolss.dll and shell32.dll