Ah, now don't I feel silly... especially since I used "there" instead of "their" in my previous post!
I have SP2 installed on several different machines and have had almost no problems. The only weird thing I've had happen is that now, if I open internet explorer and then windows messenger and click the click here to log in button it will reset the font size on my tool tips boxes (can be seen at http://img82.exs.cx/img82/8966/hovertxt.jpg
if you're interested).
On your problem however, it seems like something has gone pretty wrong. I was thinking you might have spyware, because I've seen some install internet toolbars in windows explorer, which could be causing it to try to connect to the web. But since you say you have all your spyware stuff up to date, then that shouldn't be the problem in this case... soooo... I think the next thing I'd do is take a look at the running processes and see if there's anything hogging processor time. Also, I've had general computer slow down when my video card drivers weren't installed properly on a machine.
So after all that rambling, I guess I just have this to say...
Good luck! Sorry I wasn't more help!