Hi,
When your xp box is booting, it contacts the server to see what (if any) group policy settings it should apply. It sounds like your xp box is contacting the server, and from that point is getting stuck either receiving or applying one of theGPO's - which is why a reboot of the server fixes it (IE that breaks the connection and releases the hung process). I can't find anything in particular in technet concerning XP in this situation, so the first place I'd start looking is at precisely which GPO's the user is processing (as this is a logon rather than a start up problem). look and see what OU structure the user is in, and shift them up to the root of AD. See if you can log on ok, if you can then in turn move the user down the ou structure 'til you get the problem again. At that point you hopefully will have found whichever policy is causing the problem. From there the first thing I'd check is the permissions on the actual policy file (which will be in sysvol under the guid ofthe OU that it is attached to), although another possibility is that there is a gpo setting being applied that XP can't handle (if that's the case then it's a new one on me - it shouldn't happen) Hope this helps in some way..