Thanks for that. We have tried disabling the firewall on both the client WinXP machine and the Windows 2008 R2 server, but the ping and SQL Server replication fails (on trying to connect back to the server).
I'll have to check with the systems guy about the antivirus install, but I think we had none for the time being.
I'm no network engineer, but it's like the XP machine has no gateway to tell it how to find its way back to the server.
Has anyone got a setup of Server 2008 R2 and WinXP machines to talk to each over over Dial Up RRAS?