I had this as soon as I upgraded to 2000sp3, but I hear it's common on xp as well. The issue is with pci modems, (eg conexant hcf or hsf) which run their connection through software, rather than a physical port. Both these os's then have trouble, and tend to install their own drivers which stuff things up well and truly. There's a kb article on it at microsoft, but it only mentions HP PCs as having the issue (mine isn't, nor several of the friends who've also had it).
It's a long workaround, but you need to uninstall the modem, move the .inf files out of your windows folder (so it doesn't detect and reinstall the bad one. I'd suggest zipping so they arent accessible but are easy to restore later) then add/remove hardware, using 'have disk' and pointing to where you've saved your downloaded driver (which you get from the manufacturer's site).
If that's too hard, hooking up an external modem also gets around it. For further info see http://www.modemsite.com/56k/soft56upg.asp
Good luck,
Crystal