I have just had the same issue with a Netgear card and router - here is the info that helped me get the connection fixed. Once I made these changes I had to reinstall the driver for the wireless card - which was a beta version set up specifically to run with XP -SP2 hope this helps...this might bne a little long but it solved my dilemma
Windows XP wireless problems after windows update:
Summary:
This document describes the reasons for wireless connection loss after windows update in windows xp machine and the ways to overcome it.
This document is provided in as is basis no warranty whatsoever will cover the consequences of any results. The readers are requested to try these steps in their own risk
Problem:
The document is specific to the wireless problem in windows xp where the user loses the wireless connection after running windows update ( and not installing the service pack ) in his machine.
This happens because of the installation of a recommended hotfix (815485) from microsoft from XP. This hotfix is a part of an optional but recommended windows xp update which adds WPA support to the wireless card drivers.
The indication of this problem can be like this,
1. After the wireless card is enabled and connected to the AP it will not get an IP address nor will it be able to ping to the AP. The wireless connection properties will say that it is connected with good signal strength, it will also send packets but not receive any packets back.
2. The Wireless status will say "One or more wireless networks available" when the user tries to connect , it will not connect , but it will continue to say "One or more wireless networks available". Whatever the user does will not help himto connect to the AP.
Solution:
To solve this problem we need to either uninstall the update or enable encryption in the wireless network in open key mode.
Uninstallation of the hotfix:
1. Go to control panel " Add remove programs".
2. Scroll to the bottom and look out for an entry which says,
"Windows XP Hotfix (SP2)Q815485"
and remove it
Enabling encryption:
The user can enable encryption in his wireless network which will also fix this problem. To enable encryption the user first needs to enable encryption in his AP and follow these steps to enable encryption in the wireless card.
1. Right click on the network icon in the system tray and click on " View available networks",
2. Select the network name or SSID of the AP,
3. Enter the encryption key in the fields " Network key " and " Confirm network key",
4. Uncheck the checkbox which says "Enable 802.1X authentication for this network" and click on connect.
After a few seconds the user will be able to establish an encrypted connection to his wireless network.
The user can also alternately configure encryption using the following steps,
1. Right click on the network icon in the system tray and click on " View available networks",
2. Click on the button advanced.
3. It will take the user to the "Wireless networks" tab of the wireless area connection properties window.
4. Select the entry in the preferred network and delete it,
5. Select the entry in the "Available networks " and click on configure,
6, In the configuration window select the Data encryption as WEP and Network authentication as Open system,
7. Click on the TAB Authentication and uncheck the check box which says "Enable 802.1x authentication"
Click OK twice to come back to the desktop and check the connection to the router, which will be active now.
Disabling the Wireless Zero configuration:
If the wireless card vendor has supplied a utility program for windows xp, the user can install the utility and disable the Wireless zero configuration.
The user can follow these steps to disable the Wireless zero configuration.
1. Go to the wireless networks tab of the wireless area connection properties window.
2. Uncheck the check box which says " Use windows to configure my wireless network"