Windows Explorer Error Keeps Popping Up (Sometimes followed by a Dr. Watson Pop Up)
See if it occurs when a different user account logs in. See if it occurs when using safe mode with networking.
First scan for viruses.
Clean up msconfig.
Clean up Local Settings / Temp directories.
Disable Themes? Optimise for performance?
Start - Run - Type in sfc /scannow (include the space before the " / ")
If that doesn't correct it, then I'd try a repair install of XP. This will preserve your programs and settings, while replacing all of the files that windows needs to operate.
LAN Disconnection causes this problem?