I had the splash screen then 'internal error' when launching LW. I removed Java 1.5.0.11 and installed 1.5.0.6 and LW works again!
At first I thought it was Microsoft's update for p2p so I rolled back with restore point - no joy. I closed Avast anti virus, Zone alarm and removed all ATI software, but that was not it. Also tried the delete .limewire suggestion.
Anyone else have this problem?

Pentium IV 2.8GHz
Windoze XP Pro SP2
Limewire 4.12.11
Cable 1850 -3500 kbps