I have had so many probs after I upgraded to 4.2.6 basic. I tried everything in the forum, assuming that it wasnt an sp2 related problem because I was already running LW4.0.8 when sp2 uploded automatically and it didn't effect LW4.0.8.
Eventually I thought that maybe sp2 allowed 4.0.8 because it was already there when xp upgraded itself. but wasn't going to allow another p2p connection, so I followed the 'sp2-connection problem' threads. One ID patch later (Zap or What a Ledgend, I forget now) but you will find it here, and everything working again. I think that many other people are having the same problem as I had. Note, Save it, unzip it, find the .exe file and install it and When windows tells you that you have 'changed some very important parts of the operating system and that you must let windows change it back, just cancel.
You might well see your reactivated version of LW showing 0 files being shared, but it is just using another file to default save to. Just find original file you were saving to and change it back, and you should find that you get turbo again. Apologies if this has all been said in another thread, good luck everybody, and thanks very much microsoft.