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There are many changes in SP2 that can potentially cause problems with existing 3rd party applications. There are several proxy 4.0 products that range from an anonymous Internet access proxy, to a product that helps you share your Internet connection. There are also server proxy programs that proxy all Web access for computers on a network. I don't know which product you have, nor therefore, anyway to tell you if it's built to be compatible with Windows XP, or is impacted by changes to DCOM, or is simply a firewall access issue. If you temporarily disable the firewall, can you use the product? If so, the problem is a firewall issue (turn the firewall back on, turning it off is not an answer to the problem.)
Check the products manufacturers for assistance with how to use the product with XP SP2. Use the public Microsoft newsgroups to discuss the issue with other XP users. Be sure, however, to tell more about the product you have (where you got it, what it does and so forth).
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