Just so you know, Windows XP has a firewall, as does your router. Do you even see a globe icon at the bottom of the LW interface? It isn't there in older versions, but I'm not sure what version it appeared in.

1. Make sure your firewall for Windows XP is set to allow LW access to the internet.

2. Uninstall Java 1.6 and install Java 1.5.12, available through this link (take the JRE offline installer):

Java SE Downloads - Previous Release - JDK 5

Some people are having trouble with version 1.6.1 and I'm not sure if you would need an older version, still. Give this one a try, first.

3. You can try port-forwarding your router. These are instructions for the model you named:

Port Forwarding for the Actiontec GT704-WG

Make sure your router is not GT704-WGv2 or v3...these may require different steps. Let me know if you have either of these.

Good Luck

Dan

P.S. If we can't get it working at all, it may be your ISP at work. More and more ISPs are blocking/limiting p2p users, especially at peak times. You could give your ISP a call and ask them if they do this, although not every ISP gives you a straight answer.