Why haven't you activated it? That would probably solve your problem right there.
Note: after I get everything installed I plan to install the current ZoneAlarm (5.5.062.004) and the current free version of AVG Antivirus (7.0.296) at the first opportunity, then install the SpyBot 1.3.1 with all the latest spyware definitions.
I don't remember needing to be connected to the Internet to activate it. There should either be a license sticker with the code placed on your computer by the manufacturer, or a sticker on the green booklet that comes with the CD.
Oh I almost forgot. If you really are that concerned about viruses/worms, just turn on the Windows firewall before you plug in the network.
XP SP2 doesn't give a hoot if the previous version has been activated or not. Trust me....I know.
Except the Blaster and Sasser holes will be closed as soon as you apply SP2 - both those were closed pre-SP2. And, as someone else noted, you should be able to apply SP2 even before activating. Really, you'll be fine. If you have a NAT router handy, stick it behind the router as you activate it and grab the last few hotfixes, and that should cover the rather miniscule probability that you'll get hit while so doing.