Some time ago I blogged how I got my broken asp.net working again. Which turned out to be a popular problem. My solution did not work for everybody, but the post became a place to discuss alternative solutions. The post should become a wiki, for the moment I'll recap a pattern (best described here):
ASP.NET does not work well with (some) software firewalls. My XP sp1 is no problem, according to several sources ZoneAlarm is. If yor asp.net does not work and you do have a firewall try disabling the latter.
Peter