I'm stuck in here... no clue what could it be. I have SP2 installed and since the first day I installed it on my system (XP Home Edition, but now I have it on my XP Pro as well) I didn't have any single problem.
I am using Outlook Express and I just tried to send myself MP3 file. Sent/received without any problems. I even tried the same thing with my SP2 firewall enabled... same thing, no problems.
Bob, did you try to check on Microsoft forums ? I don't have link right here, but I have to search. I used to access those forums through OE news groups. They can be very helpful, and best of all, those are binaries... so it means, you can post some attachments, like screenshots. That could help... just an idea.
Cheers !