If you have not installed the latest updates for Windows XP yet, you just might be too late. If nothing else, switch on the Internet Connection Firewall asap if you can.
For more information refer to the Security Report on the Microsoft site.
The new virus on the block is called Sasser (W32.Sasser.Worm). It's already running wild; I just read some reports about it taking Autralian Railways down.
So personally, I'm a happy man, I get to do my Windows XP SP2 talk tomorrow on the Security Summit, and can you have a better point to explain why Microsoft is doing SP2 than a virus running wild as I speak? It is not enough for Microsoft to be pushing out updates, if people will not update their machines, or if there is no basic protection. Sasser for example will have no effect if you have enabled the Internet Connection Firewall. And yes, there are reasons why not to have it turned on the way it is at the moment. That is why SP2 is such an important piece of security equipment. It will fix a lot of these problems.