These are all long shots and probably don't apply, they may be worth a glance though?
The network icon in the notification area does not update when you reconnect an Ethernet cable in Windows Server 2003 or Windows XP with Service Pack 2
"Any type of networking problem in XP SP2 will give you this “Limited or No Connectivity” message, so you may have any one of these causes of the problem"
Windows XP SP2 Networking Problems Help
Limited Connectivity
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ICS Gateway does not provide configuration to home computers
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You could try System Restore to go back a month or so and see if the Networking comes good? I don't like going back that far myself because it knocks out a lot of updates etc. As a test only it is viable as it will create a automatic restore point to bring you back to the present if it fails to get your network going.
You also have the System File Checker program startable from the Run Box by typing.....Sfc /Scannow in it and have your XP CD handy.
If they don't work you could try repairing windows by running it over itself. You will lose all your windows updates but your files will be untouched.
How to Perform an In-Place Upgrade (Reinstallation) of Windows XP (Q315341)
Only trouble with a repair is that it may copy across malware and faulty personal registry settings.
That leaves you with the option to save all your valuable data and then perform a format and clean install.