You can reinstall without formatting. I'm sure you know that, but I thought I'd point it out. Just say "keep existing file system" when it asks you how you want to format it. I've done it many times.
Also, if it wasn't doing this BEFORE the patch, the patch caused it. Same with me. I reinstalled fresh from a full install (no patches) and it's fine again.
As a side note, SP2 adds a lot of subtle things to WinXP. I'd recommend upgrading to SP2 anyways. I would, however, suggest you do so through windows update. That minimizes the risk of some CD-ROM screwing things up. Just de-select MSIE7 and any things you don't want/like. Get all the critical updates then SP2 then just check the website every month or so.