I turned on the activity animation icon in windows and it flashes all the time even though the internet status icon show not packets being transferred (byte count stays the same).
Is this a problem?
Don't know about that, but there's a bug in SP2, so that connection icon is sometimes showed on the system tray, even though that option is disabled from the Network settings.
I should've mentioned that I am in Vista Home Premium Edition - but I don't know if that will still make any difference.