I have now down loaded sp2 shoud I use the sp2 firewall and virus protection or disable it and continue to use Norton internet secruity which is up and ruuning ?
Only all this I find a bit confusing

Continue using Norton.
But first, visit their site and look what they say about SP2.
http://www.symantec.com/techsupp/sp2/faq.html
In particular this (pasted from there):
<quote>
Q: With Service Pack 2 installed, do I even need my Symantec antivirus and firewall products?
A: Absolutely. Although Windows® XP Service Pack 2 monitors your antivirus software, it has no antivirus capability itself. Your continued use of Norton AntiVirus is crucial to the security of your computer. Norton AntiVirus automatically detects and deletes worms, Trojan horses, and viruses without interrupting your work. Norton AntiVirus detects malicious code that is stored in compressed files and file archives, and identifies and alerts you to the presence of spyware.

The Windows Firewall is designed to monitor and control inbound network traffic only. It does not provide outbound traffic protection, intrusion detection and response, or privacy controls -- all critical to securing your computer from outside attacks. Norton Personal Firewall and Norton Internet Security controls all outgoing network traffic. It alerts you to intrusion attempts and automatically blocks all traffic from the attacker. Norton Personal Firewall protects your privacy by filtering confidential information (like phone numbers, credit card numbers, and bank account numbers) and by blocking cookies on a site-to-site basis.
<end of quote>
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It's as if they were answering your question.