I meant to update this earlier. There is now a fix, which you should download from the ZoneAlarm website.
For those of you that didn’t see this at the other place: Microsoft Update KB951748 and ZoneAlarm woes
In short: ZoneAlarm + Security update for Windows (KB951748) = no internet connection.
For those folks who don’t bother clicking through to my other blog post: the advice from ZoneAlarm is to uninstall the KB951748 hotfix until there is a more robust solution from either Microsoft or ZoneAlarm.
Setting your Internet Security level to Medium isn’t advised for long-term use — it opens your PC up to more risks than it’s worth.
Or just uninstall ZoneAlarm and use the Windows XP built-in firewall.