Visnu,
You may need to disable:
-Windows Update
-MS Works update
-Internet time-synchronisation feature

Two other features of XP that auto-dial the Internet
- the Search Assistant
- Help and Support Center

You may need to install the Windows XP Service Pack 1 (SP1). This may fix some bugs for the Search tool.
For the Help and Support Center,
click Options -> Search Options, then disable the option to search the MS Knowledge Base.

Also, check here for some assistance
XP Services



Note - This is just a summary of an article from Here