At first glance I'd say you should run your Windows updates. Windows XP SP1 had some bugs, so installing SP2 would be a good idea. Of course, there's the problem of how to get Ethernet to it, so you may want to download the Service Pack on the laptop and the burn it onto a CD, and then use that to install it...
If Service Pack 2 installation doesn't fix anything, check out the Device Manager under "System" in the Control Panel. If there's anything with a yellow !, then you may have to reinstall drivers for your USB ports. The files can somtimes get corrupted.
Hope this helps
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