Why is idle windows VM using so much CPU

It isn't reasonable to expect that all of the host CPU cycles will be available for the guest. There are a thousand places where computation will need to be done on the host, from displaying its own console to logging to calculating network checksums. If there is any iscsi going on this too will eat CPU. If the guest is accessing the disk for some reason but isn't using much CPU, you'll likely see more load in the host than the guest. The host might be processing traffic from the network and making routing decisions.

Given that this is an instance of some kind of vmware host in a ubuntu guest OS on a laptop, anything from the drivers which support the laptop hardware to cronjobs, update checking, time sync, and beyond can be consuming CPU. If there is software raid, there might also be some calculations going on for that. There could be filesystem indexing.

The best thing to do if it's really a concern for you (if you're not having any issues with resource scarcity it's not an issue), check out top on the host to see what processes are consuming cycles.

Note also that the processes consuming CPU might be niced. If this is the case, they will run with less priority (probably less priority than the guest) and will give way if the CPU is needed for other things.

You can't use bridge mode in such environment, you can almost be certain that the hosting partner will block all traffic not originating from the MAC-address of the real NIC in your server. You'll need to setup a routed setup, in which all traffic to/from VM guests are send through your host. One way of doing this is using the native Libvirt support of routed networking ("forward mode="route" in the XML-configuration of the network).

There's a German server hosting company who has written a couple of guides on the subject, you can use Google translate to translate it into English, in case you don't understand German :) http://wiki.hetzner.de/index.php/Kategorie:KVM