The hourglass over taskbar problem is XP is usually the result of the SSDP Discovery Service. This service searches for universal plug and play devices on the network. In the task manager processes list, the SSDP service shows as svchost.exe. To eliminate the problem, disable the SSDP service using the administrative tools of control panel. If you can't get to control panel, right click the my computer icon on your desktop and select manage. From there select services and applications and services.

The SSDP service is probably looping because TCP/IP is corrupted. That's why you can't access the internet or email. See document 817571 in the Microsoft knowledge base for instructions on fixing TCP/IP. It is actually quite simple to fix. You just have to delete the winsock sections of the registry and re-install the TCP/IP protocol. The Microsoft instructions are pretty good.

Good Luck.