Skype, failure to connect

We have set up 2 desktops in different rooms in a wired network, both connected to a router (with wireless option) provided by our ISP, O2. On one of the desktops running XP Pro I've installed Skype, have been able to create an account but spent 2 days trying to connect with no success. I've tried various tricks suggested in Skype Community but I'm still not able to connect - when clicking on the Skype icon a window comes up and just hangs till I do a Ctrl-Alt-Del. Now I wonder if this failure to connect might be due to a router/router firewall problem.

I've come across the suggestions on this site
http://www.amperordirect.com/pc/r-skype-voip/z-reference-skype-connection-problems-1.html

and *telnet* tests from both our desktops report *connect failed*.

The tracert test I've done is as follows:
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Tracing route to www.l.skype.com [78.141.177.7]
over a maximum of 30 hops:

1 44 ms 99 ms 99 ms O2WirelessBox.lan [192.168.1.254]
2 23 ms 18 ms 17 ms 94-193-88-1.zone7.bethere.co.uk [94.193.88.1]
3 * * 21 ms 10.1.3.50
4 22 ms 24 ms 20 ms linxfoundry.pt.lu [195.66.225.63]
5 29 ms 28 ms 29 ms PTLUX-Teralink-Paris.pt.lu [213.166.61.134]
6 39 ms 39 ms 39 ms 213.166.61.138
7 46 ms 40 ms 41 ms 213.135.247.165
8 39 ms 38 ms 38 ms 78.141.177.7

Trace complete.
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Unfortunately I do not quite understand the explanation for tracert given at the above mentioned site. Would any good soul here be able to tell me which are the problems the above tracert points to?

A million thanks for any clue.