Hi,
This is a known problem by MS and they have released a patch KB946627 (file WindowsXP-KB946627-x86-Eng.exe) to solve the problem. One can manually solve the problem by just changing one Registry value. Visit MS website for detailed explanation.
After application of patch my IE has been working for a while. What I've noticed is that even afer applying the patch - periodically - same behaviour is exhibited. Then if you run the patch once again - IE starts working (like it happened today - i clicked on IE twice and saw it in currently running programs in Task Manager but it would not come up on screen. so I killed IE in Win Task Manager and run the patch and then clicked on IE and it came up on screen).
I'm looking for a permanent soln. Any ideas? I've a feeling that running this patch with admin previledge would solve the issue. i've not tried the same as i've disabled 'admin' a/c. But i've run it several times using admin equivalent a/c and i get above mentioned behaviour