Ok, I've now installed XP Pro with SP2 and all the subsequent MS updates since its release.
Updated the driver for my modem.
Ran BearDIAG - it worked this time. Uninstalled Bearflix and installed the recommended version of BearShare 5.1.0b25.
Changed the port on BearShare to 6350 (friend suggested). There's a note that says that the UDP won't update untill after a restart so I restarted the comp.
Ran BearShare again and still get the unable to connect to gnutella network error.
Ran BearDIAG again, it made some suggestions:
1) Check HD for errors. Done this (inc for system errors). HD is clean.
2) Configure my router. As far as I know I don't have a router. I'm using a modem and not connected to a local network.
3) Configure a static IP address - don't know how to do this.
4) Configure firewall to accept port number. I'm using the built in firewall for SP2. BearShare is allowed. I could also allow TCP and UDP as ports directly, but otherwise that's all the options you get. Also, not sure what UDP port number is (is it the same as TCP?) as this is not said anywhere I've seen.
BearDIAG says there's something wrong with the UDP port. I've attached the BearDIAG report.
Note: it would be odd if this was a firewall issue since it started when I had XP Pro without any firewall enabled (not even the built in ICF).
And all this started after I uninstalled the most current BearShare and reinstalled the old version which had always worked before (for years including in Win98). The new BearShare has killed my old BearShare