I ended up reinstalling xp completely.My XP includes SP1,then chipset drivers & modem.Straight after I installed Gnucleus & it worked perfectly.Then installed SP2 (nothing else) & it began the timed out crap again (the small icon for search on the Gnucleus front page always being blacked out is usually a good first indicator).I ticked the exceptions box for Gnucleus in the firewall page,still nothing.So it is definitely an update Microsoft has slyed in after sp1,because even after removing sp2, it still refuses to connect.
Someone who understands registries well, could probably pick the changes to it, quicker than me,as whatever the spanner is,it remains after sp2 is removed regardless.
A clue for those people who are good at troubleshooting though,after my last xp reinstall,incl sp2 & all MS updates, that stopped Gnucleus working.
Because I swapped drives(SATA),I was able to drag & drop my original working version of Gnucleus over to the newly installed XP drive that had a new non-working version on it.Both were the same Gnuc versions & I did not do anything to the firewall.It began working perfectly again. So what the?

To add a bit more,I dont use any other network programs etc either.
Microsoft would be under tremendous pressure from the powers that would ( or want to) be,to stop programs like Gnucleus from working.No conspiracy just a fact.If you count just the numbers of people that cant install windows or configure firewalls etc,a simple update block would stop millions from being able to file share. For awhile anyway,then throw another one into the mix!