Just double check that your XP firewall is off & that your McAfee is configured to allow LW.
Port Forwarding for the McAfee Security Center

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

The modem details you've given sound like an internal modem...do you use any external modem or router (just checking)?

See if the LW Beta version connects. You can download the Beta from the usual LW download page.
Lime Wire » Download LimeWire

If all that fails, delete LW's preferences folder when LW's properly closed. See point 3 here & also point 2 if you've used older versions of LW in the past (there could be a folder in either or both locations...delete both if you have both).
Fixes for LimeWire
This will kill all of your settings within options, you'll have to go back through afterwards & reset things. If you're not sure of your settings, go through LW's tools > options & write them all down, so that you can reset things later.