Sorry, I should've been a bit clearer & said "delete the preferences folder again"
It's a good idea to delete that folder after updating or upgrading LW

You could also try NT compatibility (even though you have XP) & running as administrator...see that 'fixes' thread in my previous post.

Are you running Windows & Norton firewalls together? Don't...they'll conflict with each other. Turn off the Windows firewall & configure Norton to allow LW.
PortForward.com - Free Help Setting up Your Router or Firewall

You're using a wireless adapter...what's the brand & model of the modem/router that you're wirelessly connecting to?