I agree that SOAPboy was not exactly sympathetic to your plight, but in his defense, do you routinely install software, without knowing what it does? There were myriad articles published in print and online that went over the fixes and 'features' of SP2 - with the enhanced security features the most frequent topic. Knowing that SP2 added a firewall, this would be a prime suspect when troubleshooting the problem (network connectivity issues). Any firewall would require configuration after installation, it's just that MS assumes that the average user doesn't understand firewalls, and dumbed it down (a lot), to the point where you could easily blink, and miss the firewall dialog.
That said, it's still an easy thing to overlook. I've certainly made those types of oversights myself. If you have a firewall in place for your entire LAN, I would disable the XP firewall immediately after upgrading a machine to SP2. If not, I would look for a third party firewall that is a little more robust - Zone Alarm is one I recommend highly. It is much more interactive in notifying you when applications want to use the network.
Historically every service pack that microsoft has ever relased has had unintended side effects with various pieces of software, some MS, some Third party. In my experience, the benefits have outweighed the downsides. YMMV.
Regardless, glad to know you were able to fix the problem.

SOAPboy, just curious, do you work in tech support? Your empathy will surely get you places. Believe it or not, a lot of sysadmins were not trained for their jobs - they just happened to be the guy least afraid of all the computers and sort of wind up there. Not to mention, some people may specialize in Novell, MS, Linux, Unix, hell I even know some people still maintaining VMS/VAX systems. NOBODY knows it all, and with the playingfield changing all the time, even the best can miss something "obvious".