Whoohoo! I'm very happy to say that all is right with my external firewire HDs since I installed a XP hotfix a couple weeks ago. You can find it here:
http://support.microsoft.com/default.aspx?scid=kb;en-us;885464
Read the symptoms and see if it applies to you. I said yes to all the above. My machine is a HP zd7000 laptop with a TI chipset. I also have a Firewire 800 cardbus adapter with a TI chipset I'm using with it that was having the same problems. Microsoft doesn't have the patch available for download off the page so you'll have to contact tech support to get a FTP link to it.
Words cannot describe how great feels for me to put this issue to rest after being plagued by it for so long and losing some very important data. Now I'm free to do my work instead of fight the technology!
John