Do this... go into safe mod XP. You do this by hitting F8 right before the XP boot up screen comes. Try it a few times if it doesn't work. Then boot up in "safe mode". Log into your system and go into control panel to uninstall the program that has sniffer.sys associated with it. This could be the program the previous poster referred too. If it doesn't let you uninstall then do this (cause this always works unless your underlying XP system is hosed):
The other trick is (while in "safe mode") to do this..
start -> run -> type "msconfig"
Go to the Startup tab and hit disable all.
Next, go to the Services tab and check the box next to "Hide all micrsoft services". There should be a small list of services left over then you want to hit the button that says "disable all".
Now shutdown and restart the system as usual. Try logging into your system and see what happens. Everything should work as normal. Now trying uninstalling the offending program. Once that is done, restart. Now go back and let windows start up normally. Go back to "msconfig" and bring back one service at a time and see where the problem is. Once you see the offending program you may have to go back to safe mode and uncheck it in "msconfig" then restart the system normally and uninstall the program.
I hope I made that clear enough for you. Fire off questions to me as necessary.