[Ted]

Are youo using battery power or AC?

Assuming you're running Windows XP, right click on the desktop and click on Properties. Then click the Screensaver Tab and then the Power button. Now, we'll go through the various tabs:

Hibernate - uncheck Enable hibernation box
Power Schemes - Drop-down menu - Always on
System Standby - Never
System hibernates - Never

Now, on the Advanced tab, I'm not sure if it'll make a difference or not, but set the two drop-down menus to "Do Nothing". I'm thinking that maybe when the lid is closed, it triggers one of those actions.

Now, go to the Control Panel and click on Network Connections and then Local Area Connection. Next, click on General (tab)/Properties/General (tab) again/Configure/Power Management (tab) and make sure "Allow the computer to turn off this device to save power" is unchecked and "Allow this device to bring the computer out of standby" is also unchecked.

If that doesn't help, post back and I'll see if I can Google something.