I've tried to do a repair install of Windows XP, however, even that failed to solve the problem. The only way I have managed to get this sorted, is to completely reinstall Windows XP. The final machine ended up with the same machine name, IP address, service pack, software, and in the same OU, and having the same group policies applied to it as the previous build.
So as to what was causing this issue, I have no idea! Just glad it is now solved!