Infrastructure Software

Hi,
We are facing some performance problem.We are having 2 processor each with 2GB Memory. When i use mpstat, it shows 98% of CPU Utilization.

MPSTAT shows,
CPU minf mjf xcal intr ithr csw icsw migr smtx srw syscl usr sys wt idl
1 0 0 101 419 318 254 0 41 27 0 120 0 0 0 100
2 0 0 4 101 100 470 1 44 28 0 297 0 1 0 99
CPU minf mjf xcal intr ithr csw icsw migr smtx srw syscl usr sys wt idl
1 259 0 250 620 481 547 149 40 51 0 77200 81 4 0 15
2 103 0 131 246 100 738 177 41 45 0 31555 78 4 0 18
CPU minf mjf xcal intr ithr csw icsw migr smtx srw syscl usr sys wt idl
1 345 0 294 528 380 585 199 45 34 0 52197 92 5 0 4
2 571 0 350 279 100 748 227 43 41 0 19897 92 6 0 3
CPU minf mjf xcal intr ithr csw icsw migr smtx srw syscl usr sys wt idl
1 30 0 271 501 378 512 125 36 23 0 2621 66 2 0 32
2 25 0 50 215 100 1173 466 36 27 0 2970 82 3 0 15
CPU minf mjf xcal intr ithr csw icsw migr smtx srw syscl usr sys wt idl
1 31 0 130 421 321 266 3 40 26 0 259 3 0 0 97
2 0 0 0 102 100 469 2 40 33 0 260 1 1 0 99

VMSTAT shows:
procs memory page disk faults cpu
r b w swap free re mf pi po fr de sr s0 s1 s6 -- in sy cs us sy id
0 0 0 2786624 2793936 0 0 0 0 0 0 0 0 0 0 0 431 557 741 3 0 97
0 0 0 2786624 2793928 0 0 0 0 0 0 0 3 0 0 0 439 452 730 0 6 94
3 0 0 2785128 2793848 0 45 0 0 0 0 0 2 0 0 0 592 6416 900 12 2 86
11 0 0 2733944 2790808 3 640 0 1 1 0 0 1 0 0 0 678 170914 1291 93 4 3
9 0 0 2574056 2783304 3 625 0 1 1 0 0 0 0 0 0 711 6087 1352 92 4 4
4 0 0 2567872 2782720 10 37 0 6 6 0 0 1 0 0 0 533 3808 1497 48 2 50
0 0 0 2585912 2783584 7 21 0 0 0 0 0 0 0 0 0 424 514 730 2 0 98

When i read some books, it is mentioned that when the scan rate (r value in mpstat) is zero, then it means that there is no memory shortage and memory leakage.
Then what else can be the issue...??

Please help me,

thanks,
KNS.