Do you have Indexing turned on, I don't, and I get a message about "The Index Service query cannot be completed successfully because the volumes you have specified are not indexed". This was from the main Search window.
A bit of information about a possible bug is contained in this link, with a Windows 2000 fix, which may or may not work in XP?
can't search for strings starting with "#" character
and find this file and fix called xp_persisthandler.vbs - Enable XP's "Search" to find text in files. It is reached via Win XP Fixes/ Win XP Search Problems/ Can't find files containing text.
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