Microsoft recently released a new patch which fixes a bug in Windows XP Service Pack2:
This update helps resolve an issue on computers running Windows XP Service Pack 2. Programs that connect to IP addresses in the loopback address range may not work as expected and you may receive an error message indicating you cannot establish a connection. After you install this item, you may have to restart your computer.
The patch can be found here
New patch for Windows XP SP2 (KB884020)
