You don't need to turn off the XP firewall - just make sure that it's configured to allow LW. Check out the links below for info.
Windows Firewall - LimeWire
PortForward.com - Free Help Setting up Your Windows XP Firewall.

It doesn't look like there's a firewall within your modem. Do you have a router as well?

Did you try a few different ports? Have a look through the link below - there are lots of different fixes to try. Go through them one by one & let us know if you have problems with a particular fix
If LW Will Not Connect

Your Java version is very old, you should update that. The help thread above has info about updating Java.