There are several reasons why this is happening with your PC.
1. If u have a slow PC then this is normal to happen with SP2 installed.
2. After installing SP2 there could be some driver problem. If u are using USB mouse (optical ) then check in the device manager if it is detected correctly and configured correctly. Even if it is configured correctly go to Windows Update to get the latest driver for it. Legacy support for USB 2.0 requires additional drivers with Windows XP.
3. See if your computer is overheating or not. This also happens when your computer overheats and hence the OS stops responding.
4. Try disabling additions services this can also help.
5. Try to wait up till your Antivirus Software has fully loaded when you start Windows XP. That is wait and just look at the RED LED, when it stops and starts to flicker with delay, Start working on your Computer, your computer will not hang again !! ( Actually Windows XP has not been loaded completely and also some services are still being loaded in the background but you see the desktop ready, which actually is not ready. )