Another alternative is un-installing SP2. Microsoft gives instructions for this. SP2 can be removed, just like any other program. But I consider that a big risk. It's true that during the installation of SP2, the wizzard provided for this when it backed up my earlier Windows files, but who knows how good that backup was, or how good the restoration will be when SP2 is removed? Rather than possibly botch up the whole operating system, it's easier to swap modems, or if necessary, ISPs.
Also, I've learned from painful experience that if you roll back to an earlier Windows configuration, some programs won't work because the upgrade also changed some drivers that somehow stay in the system, notwithstanding the rollback. I guess they just overwrote the earlier versions, which are now lost. As a result, there's always a driver or two that isn't restored. Instead, you're left with the new drivers, and -- being designed to work with the latest version of Windows -- they won't work with programs that used older drivers for your prior version of Windows. I don't know if I explained that, but anyway -- I don't want to uninstall SP2. You can't easily turn back the clock.
I think you're pursuing the right course. See whether the new modem takes care of the problem (could be a simple hardware problem -- my guess is no). If you get another ISP, the new ISP may give you an Ethernet card (mine did). Ask (it can't hurt). And if you do decide to go the network route, you can always get a wireless firewall/router. That way, if you have other computers in the house (I have a ton), getting them networked won't require drilling holes and pulling cable. Cheers!