fairly common issue, a pain to resolve! much trial-and-error...
in the vpn properties page (somewhere) there is a checkbox that says
something to the effect "use remote gateway to access the internet". Try
changing it and see how it affects things.
basically, XP is not too smart about setting up the routing table; it
routes ALL traffic either thru the VPN or not. google around for hints on
how to manually setup the routing table so that ONLY traffic to nodes
on the remote lan pass thru the VPN, all other traffic passes thru the
local lan. [you can "see" this effect, by watching the two little icons
in the tray, one for the vpn one for your adapter; only one will blink,
indicating which one is passing the packets; usually it's the vpn (when
above box is checked)].
One way to get around this is to make sure your lan's subnet is DIFFERENT
than the vpn's. Both very often default to the 192.168.0.0 subnet; try
setting your local as 192.168.100.0.