I've just done my 2nd re-install of XP in 3 days due to a nasty virus
problem. I also installed FS2002 (my fs2004 is on the way back to me from
my mum in Oz) which apart from a small problem after installing SP1 is
running fine.
Er.. anyway, my point is, have you virus checked and updated your machine
fully? The virus I had previously stopped any updates from being completed
and closed down my virus checker and thwarted any attempts at patching or
installing system files like DirectX. To top it all off, it left a mystery
process svchost.exe which was running rpcss.exe at a constant 70% cpu.
I can suggest doing a complete re-format, re-install and installation of a
good virus checker (I used Avast) before anything else and especially
before accessing the internet!

Jafar