The OS which i use is Windows XP Professional SP2 and with postgres 8.3.
I require a way to tune the performance of postgres so that it doesn't hit CPU utilizaion to 100% while performing bulk insertion and update.
How many cores do you have, and why don't you want CPU util to go to 100%? This is a database we're talking about. It was designed to do what you ask it to do as fast as it can not to sip resources so it doesn't interrupt your minesweeper game.
You can import 3000 records in a tiny fraction of a second using copy. So if the process is dragging on for long enough to be complaining about it, you really need to be asking what you are doing wrong with your process and not how to configure the server to use less resources.