I've seen similar problems with XP networking [I had it on 2 PCs at home both running XP Home edition] over Xmas/New Year.

The 'fix'/work around is to enable the 'show icon in notification area when connected' option for your Local Area Network Connection [do this via the properties of the network connection]. you can get to your networking setup quickly by right clicking on "My Network Places" on your desktop and selecting Properties [not many people know that], or via Control Panel.

Then when your PC has stopped communicating right click on the network icon on your system tray (aka Notification Area) and select the 'Repair' option. It will go off and do some stuff and come back and report 'network is repaired', then your PC should start communicating over the LAN/WAN again.

Every time a coconut on my 2 XP machines that fixed the problem for a random period of time.

But it proved I had a problem with XP and not something else. I think it is a ARP cache issue, in that whenever I checked with "arp -a" my ARP entries were all gone - including the DNS gateway box [a Nokia DSL router].
The network Repair option made pings to my DSL router work again.

In the end I disabled half the networking protocols and ensured that it was running the bare minimum protocols and the problem stopped happening.
I use fixed IP addresses so I know its not DHCP.

I also was running VMWARE on one of the boxes but the other wasn't so I can't finger VMWARE as the culprit.

I think the problems only showed up once I enabled netowrking in my XP boxes to other Windows PCs on my home LAN.

This may help you stop going crazy and/or help you track down the problem, while giving you a useful workaround in the meantime.