What I would do in your position would be to install a gash HDD and do a clean install of Win XP up to and including SP3.
Check to see if that works correctly - i.e. provides networking correctly in Safe Mode plus Networking, and NOT in plain Safe Mode.
Then apply all the MS updates, check to see that it all works.
Ditto with your AV, anti-Malware, firewall, etc.
SD