Bhat,
Fn+F2 (and the front LED) is enabled by installing the Wireless Console Utility from the ASUS drivers CD. It doesn't really disable the wireless connection (at least for me). To do that, I have to disable it in Network Connections.
I don't have any problems with standby. Be sure you install the ACPI Control Driver (aka ATK0100 ACPI Control Driver, ATKACPI Driver etc.) BTW, how does one get hibernate to work on a clean XP install?
Be seeing you...
---> TBC (Taste Bud Challenged)