Try installing this version of Java. Use the JRE offline installer & remove your current version of Java before you install this one.
Archive: Download Java 2 Platform Standard Edition (J2SE) 5.0 Update 11

You don't need to 'get' a new preferences folder. Delete the old one(s) when LW's closed...next time you start LW a new prefs folder will be created But all settings within LW's tools > options will be changed...you'll have to reset all those options back to the way you had them originally. So if you're not sure of all your settings, go through all the options & write down your settings before you delete the prefs folder. Then you'll be able to reset things back to the way you like them afterwards.

My preferences folder (mine's not the .limewire, it's the hidden folder within Application Data) is 13.1 MB. If you have 2 .limewire folders, delete them both. You're using a new version of LW, so chances are you'll also have a preferences folder in this location C:\Documents and Settings\your name\Application Data\LimeWire.
This folder's hidden by default, so you'll have to show hidden files & folders in order to see it. If you have one of those...delete that as well!


When LW's opening again, if you want to get rid of the brick wall icon, make sure your XP firewall's configured properly.
Firewall setup

Your router has a firewall, so you could look at port forwarding. The instructions are here.
Port Forwarding for the Actiontec MI-424-WR