I ran SP2 on a network with the same exact router with no problems, so I'm guessing it's a setup issue rather than a combination of the two not working together. I would try:

a) Do a reboot of your router. Pull the power, wait 20 seconds and plug it back in. If that doesn't work, you can do a hard reset by... (trying to remember here, I don't use that router anymore)... I think by pulling the power and holding the button in on the back for like 10 seconds or something. Netgear's site should have that info. But if you do so, you'll need to reset all your settings. You can download a config file from the router to your PC to save your settings for later upload back to the router.

a) Log into your router at 192.168.0.1 and see if you have limited internet access to certain MAC addresses or IPs on your LAN. Turn some of that stuff off and

b) It could likely be a combination of SP2's new security features and the router. Maybe disable the XP firewall or something?