I haven't seen any reports of your kind of problems with WinXP SP3, but there are some things that rumors say probably are in the update that could cause something(s) like what you describe.

Microsoft claims to provide free support for problems with security patches. The problem is that there is no way to contact them without giving them a credit card number (a required entry to get into the direct support connection) and they decide after you've given them your bank account and posted your question there whether it's free. In the very few instances when I've been desperate enough to log in for direct support, "arguing vigorously" has avoided paying them my money, but in at least one instance resulted in a refusal to provide support for what was (IMO) a critical problem.

Your internet service provider (ISP) may be able to help. Depending on who provides your connection, they may have advice on their website. Some, but not all, ISPs actually provide support phone numbers. Settings may have failed to migrate correctly or were "upset" by the SP3 installation, and just need to be reset; but you may need ISP support to get the correct settings for your service. There is a remote possibility that the settings needed might be different with SP3, but I've seen no reports of this happening.

A fairly recent Microsoft Knowledge Base article may be of some help, and gives the "official" how-to-get-support tale:

Information about Windows XP Service Pack 3 (article 936929).

More to follow for general info (if I don't doze off), although I can't really offer anything specific to your problem.

John