If you want an ethernet connection have you checked that the ethernet adaptor of the xp machine is up to date - go into device manager and right click on it when you will see the option to update driver.
"Keeps trying dial up and failing to recognise connection to hub"
Go into "Control Panel > Internet Options", select the Connections tab and ensure the option Never dial a connection is selected. If there are any dialup connections configured which will never be required again, you should delete them.
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