Would like to chip in here if you don't mind, I'm running the same OS and service pack and have the exact same problem.
Specs: Pentium 4 3.0ghz, 2gb Ram

This is on a fresh install XP that boots pretty quickly it's definitely a software issue, the OS boots in no time but hangs for a few minutes before I get the network icon, it does the same thing whether on the wireless USB dongle or built in NIC