I have found SOLUTION:
I tested the connection with a Dynalink RTA100 and that did not fix the CD/restart issue...or the frozen "windows is shutting down screen".
I then tried Registry Mechanic in case there was a registry error...still no fix.
I then decided to uninstall one at a time the networking components in the network connection properties.
None of the other components, excluding TCP/IP which couldn't be uninstalled, resulted in a fix.
However, the removal of Client for Windows Networks fixed the problem.
I still manage to get ADSL connectivity etc without this service installed (Windows XP Home) but it solves the two issues I was having before.
This may have something to do with the fact that I connected this computer into my domain's switch to get ADSL for updates etc prior to delivery. But I cannot be sure of what might have happened there, if anything.
Hopefully this helps someone in the future.
Thanks
Rohan