A vulnerability on your system is being exploited by a worm. You need to update your system: http://windowsupdate.microsoft.com/. Then configure a firewall: http://www.microsoft.com/technet/security/topics/network/firewall.mspx. Also, see this column I wrote on firewalls: http://www.microsoft.com/windowsxp/expertzone/columns/northrup/02august12.asp.
Lastly, you will need to install some anti-virus software.
This was first published in April 2004