You have 2 firewalls then. Remember XP has its own. After LW has been open for perhaps 20-30 mins can you do this test for us: Bug Report instructions & sample image Is it True/False?

Try 2 things for now to stop the freezing: Go to LW's Tools>Options>Speed & tick Disable Ultrapeer capability option & press Apply button. Then go to Options>Upld>Basic & reduce the upld speed to at least 80% & press the Apply button again.

Whilst you have the speed to cater for Ultrapeer (UP), your modem itself might be an issue. USB modems (but I'm not sure about yours) tend to draw their power from the usb card on the comp, & also use up a % of your comp's processing power.