Xserves updated to Mac OS X 10.6.8 are likely to experience a problem where the hwmond process consumes up to 95% of the CPU, thus slowing the Xserve down significantly.
Apple has acknowledged they are aware of the issue and it is being investigated by engineering. More information can be found here: https://discussions.apple.com/thread/3138473
A couple of workarounds have surfaced, in addition to reverting to Mac OS X 10.6.7 Server. One is to unload the hwmond LaunchDaemon (sudo launchctl unload), but this has the side effect of disabling the server’s hardware monitoring, plus it turns off the front LEDs on the Xserve that indicate hardware problems. Another workaround is to replace the hwmond sbin and two associated kernel extensions from a Mac running Mac OS X 10.6.7 Server.
Until Apple addresses this problem, it is not recommended that you update an Xserve to Mac OS X 10.6.8 Server. If you already have, and are experiencing the hwmond process consuming a high amount of CPU activity, the two workaround listed above are purely use-at-your-own-risk. Reverting back to Mac OS X 10.6.7 Server from a backup would be the safer solution.