*predicts flamewar* hey didn't need ms cleo for that! lol
lot of problems with sp2, it is USUALLY just a user error. i highly suggest getting it though. After all, it is just a whole bunch of windows updates put together, so not getting the sp2 is kind of like not getting updates. (in my eyes)
anyhow read this thread, the last thing on it has the order i suggest doing your format it.
about your problem, some times a good reboot will help. see programs dont always "stop" running. humans aren't perfect and therefor do not make perfect programs. basicly after they are gone they still use up some resources so you might try and reboot first. if not id just format
oh and i hope i didn't offend anyone with the SP2 thing.. sorry if i did