All the same, you should update your installshield engines. You can find a link to the updater in a sticky at the top of this section.
ALso you should update your java:
Java 1.4.2 (click on link) Oh you already did that.
LW 4.2.4 has been released.
What brand name & model number of modem/router do you use? It may well have its own firewall. Also did you check the SP2 threads on the forum. SP2 can limit connections.
Double-check your XP firewall & others:
http://www.limewire.com/english/content/firewalls.shtml
Give LW some time to connect. To work thru difficult times try leaving it on 30 - 60 mins. See if that makes any difference.