Yes, SP2 is well-known to cause all sorts of issues with programs that rely on Internet connections to work (IM can also be affected).

I'm not completely sure since I don't have SP2 on any computers, but I understand a new feature it has is an integrated pop-up blocker with the Web browser, Microsoft's Internet Explorer. I believe there's an option in the browser's toolbar that now allows you to click on it if you want to allow pop-ups for a specific site. You have to do that for this site, because the chat software opens up in a new window (which the browser thinks is a pop-up ad).

Try that and let me know if that works....