Core issue
Windows XP SP2 normally disables itself when it detects a third party firewall installed. After machines receive an update to the Windows Genuine Advantage Validation Tool, both CSA and Windows Firewall are enabled and CSA starts blocking ALG.exe (application layer gateway) from connecting from the local host to the local host (when attempting to make an FTP connection).
Resolution
The resolve this issue, create a rule permitting ALG.exe to connect to the @local variable from the @local variable FTP.
This issue is documented in Cisco bug ID CSCse06189.