A fresh install of XP has Internet Explorer 6 installed by default. IE6 will no longer connect to the internet properly. You need to download IE 8 from the Microsoft website. You will need to do this on a different PC and copy it to a USB drive. Once IE 8 is installed XP will connect to the internet and update.
Note you can download Service Pack 3 from Microsoft, look under Administrator options, and this will bring XP up to date, almost.