Domain user or local user Cannot download files in winxp sp2

Archived from groups: microsoft.public.windowsxp.security_admin (More info?)

Any of our clients that have SP2 installed on WinXP can no longer download
files from our site. The following error message appears:

"Internet Explorer cannot download....nameoffile etc
Internet Explorer was not able to open this Internet site. The Requested
site is either unavailable or cannot be found. Please try again later."

if you login with a local or domain admin it works very fine.

even if you try another pc that is out of the domain you still have the same
problem.
so its not a group policy problem.

i think XPSP2 has a problem in user security settings and there should be a
fix to work around this.

another thing with office 2003 , user can no longer insert embedded objects
unless he is a power user or admin.

Note: XPSP1 was working just fine with these 2 problems.

Please post your suggestions if you have any.

Thanks