When will these ISP's learn that a USB xDSL modem/router is for the birds :x
I think you can resolve this issue if you can convince the ISP to give you an external Ethernet xDSL mode/router instead

However this is the tricky part because to keep the costs down USB models are much cheaper to produce however due to the high-bandwidth that most broadband connections have they do seem to run into all kinds of issues like what you're experiencing...
Good luck in convincing the ISP of this.
You may also need to do some googling to find some BETA device drivers for XP, also if you have the make and model of your USB device, please post that as you mentioned Atmel, these seem to be the most problematic of the bunch I'm sad to say
