I'm seeing this on 12.04 with 3.4.2-0ubuntu0.2.
It's not only eating most of the CPU, but also tons of memory - this morning I 
unlocked the computer and g-s-d had 4.3GB VIRT, 3.2GB RES!
After killing, it only takes 450M VIRT and 8M RES.

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https://bugs.launchpad.net/bugs/969359

Title:
  [keyboard]: gnome-settings-daemon consumes 100% cpu (and blinking
  numlock)

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