That's not the best way to use the SmartStrip.
I'm not sure of your particular requirements, but there are better ways that won't have your side affects.
Is there a reason you have the BIOS set like that and a reason you have the Happ button set to the ATX power switch?
I concur with 2600 on this. It puzzles me why everyone does funky stuff with their power control schemes when wiring a momentary push switch to the MB control switch would be the best solution in 90% of the designs I've looked over. Replacing the existing momentary switch or wiring in parallel to the existing switch to the motherboard should pretty much negate any need for tweaking the BIOS. There should be a setting somewhere in XP to power down the PC when hitting the power switch. If not, a keyboard shortcut to powerdown would be the next easiest solution in my eyes.
The power up after loss of power is meant for computers with server duties, such as a home, printer or network server.
Killing the power at the ATX side instead of a proper shutdown puts the computer at greater risk for all sorts of problems. The most obvious being a hardrive head crash. Newer drives are better equipped to handle sudden shutdowns "floating" the head to the appropriate sector (usually 0) before parking the head, but you still don't want to take the risk.
I mean, each builder configures their own system however they want. It just puzzles me why a lot of people choose to wire into the ATX and modify the BIOS rather than wiring/configuring it the other way. It just seems to me a much easier and safer solution.