I hope by now you have solved your problem. I just got a new computer
with Windows XP Pro SP-2 and had the same problem, as do many people. I
had been searching the web for solutions and finally came up with two.
For me it had to do with my Microsoft Wireless Desktop set, and more
specifically I think it's primarily the USB connection for the mouse.
Do not connect the the desktop set/mouse to the USB port. Instead, use
the PS/2 connections. I will quote the Getting Started pamphlet for
Microsoft Wireless Desktop Sets:
"1. Shut down and turn off the computer. 2. Plug the purple PS/2
connector into the computer's round PS/2 keyboard port. 3. Plug the USB
connector into the green USB-to-PS/2 adapter, and then plug the adapter
into the computer's round PS/2 mouse port." Bingo! My screensaver
started working. The other solution involves disabling the DVDlauncher.
Here is the link:
http://support.microsoft.com/kb/911895/en-us. I hope
these answers help you or anyone else. I was totally distraught over no
screensaver functions. I visited so many support forums looking for
answers, I wish I could go back to them all to give them my solutions.
It would take a long time!