I just did a fresh install of XP with my newly acquired SP1. I followed the instructions and after I booted my system after installation, I experienced the exact same problem. Windows would take forever to load. As I was troubleshooting, I made a booboo that necessitated having to start all over again from scratch.
I gave SP1 another shot, only this time instead of rebooting immediately after installation, I ticked the box that said not to reboot right away. I don't remember what it was I did or installed but when I rebooted my system the next time, it loaded up right away, just as fast as before SP1. The only thing I can suggest now is to format, install SP1, but don't reboot immediately afterwards. It's a longshot but you never know.