browser rejecting cookies after XP SP2 installed from microsoft

Hi,
Please can someone help.
I have recently installed an XP upgrade on my pc to take it from Win 98 to XP. Needless to say there were several updates needed doing, one of which was SP2. All was going fine until SP2 installed. The PC was working fine until the next re-start after which every time I try to sign into my bank, MSN, or any other site that needs cookies it says my "brower is rejecting cookies"
I have tried all the obvious options like internet options-tools-and checking cookie settings, allowing known sites, checking settings against a friends and NOTHING works. I am hoping that you will know what to tell me to assist.
THANKS
Lynn