Did you change the Hourly division from bi-weekly or semi-weekly to weekly?  If you started processing payroll weekly but didn't actually change the division settings then the program calculation will be incorrect and it would be by about a factor of 2 such as you are seeing.   The way it works, based on the division setting it takes the pay per pay period and projects forward to get an annual total and then calculates the appropriate withholding.  If you are processing a week's pay but the division is set for bi-weekly then the calculated annual total will be way too low and the resulting tax withheld will also be too low.
 
Also, if you are still on 2002.4 with no updates, then there may be other inaccuracies (although certainly not a factor of 2) because some of the calculation logic is in the tax table which you can update but some is embedded in the program and requires programming updates when states or the federal government makes changes.  We do have updated payroll programs available as part of the IS Tech DBA updates.

When you go into PR-B and select an employee in the hourly division, does the "Days in Period" show 5?  That is what it should show for weekly pay.

Double the factor in the fed and CA state tables comes close with the fed (12% greater than manual calculation) and way off with CA ( 130% greater than manual calc)
 
Open for suggestions....