Okay, lots of things going on, and they are interdpendent.
1. There is an issue with your Winsock service. The WinsockFix utility I linked above should have cleared any issues except in the instance that some of your required services are not running.
. Click Start, select Run, and type C:\WINDOWS\INF in the textbox.
. Click OK.
. Locate the Nettcpip.inf file.
. Right-click the file Nettcpip.inf and select Install from the menu.
Reboot.
2. There are some odd things that can interfere with DHCP services on a machine.
. Check that NAV is not a problem:
. Check that "hidden" firewall components are not an issue. PC-Illan, for example, will create this if you use standard default settings for the installation. Other antivirus programs can do the same thing. "Disabling" firewall products such as ZoneAlarm, Sygate and Norton is not enough to prevent issues. Either uninstall or set them up so that your local LAN is a Trusted Zone for all traffic and all traffic types.
3. I want you to carefully check that the NTFS permissions, (not the Windows Share settings), make the folders available for your LAN users. Steve Winograd has a great checklist, do not skip any steps:
4. If still no joy, re-run the WinsockFix utility.
5. If still no joy, replace the network adapter, or update the drivers for the existing one.
6. Consider again both choices from #5 above. It might be a bad NIC.
7. Do a repair reinstallation of XP: