Where the "oy" have weird little French double dot things on the top of them. You can still ping by IP address but DNS and a whole lot of other stuff is poked.
Even a repair install didn't fix this! I was beside myself until uncovering a little documented command.
netsh winsock reset
and then reboot the computer.
Fixed it up a treat. Apparently viruses and the removal of program's like Norton's and CA Anti virus can cause corruption in the winsock components of XP and the result is busted networking. Running this command will reset the whole winsock subsystem.
Another handy one that has helped me out in a few situations like this is
netsh int ip reset resetlog.txt Do it from a command line and have a look at the log, it does lots of cool stuff that can fix a huge amount of problems with windows networking.