DHCP client failing on Windows XP-SP2/SP3

Hi,
I am posting this query related with my Ethernet [Fast 10xgbe KX4 interface
Fast Ethernet Controller Card] controller driver.
Test scenario: Installing Windows XP- Service Pack2 and installing my
driver; During Auto IP assignment from the DHCP Server [in another Server
Blade which is running with Win Server 2003]
Issue: Client port doesn't take the IP from the DHCP server.
Steps:
1. Reinstall WinXP- SP3 in the server blade.
2. Install driver for 10Gbps Eth Controller with AUTO IP assignment
option.
3. the client is sending DISCOVER packet [Sniffing the packets using
Ethereal tool; Ethereal Pktformat: Src: 0.0.0.0 Dest: 255.255.255.255]; Not
getting OFFER packet from the DHCP server [which is running in Windows 2003
Server]
[In Serverside packet sniffer;
* no DHCP packets found[DISCOVER, etc.,]
* checksum err on UDP pkt received ]. The client retries with sending
the same DISCOVER pkts thrice, but it results same problem.
4. The client settled by message "Limited or No Connectivity".
5. release /renew results same bug.

The problem persists either in network or its due to the SP2 /SP3???

*************
In another observation, While the 2003 server port broadcast its server
capability packets[Browse: Domain /WG announcement / Local host announcement;
DHCP: Inform/ACK] [after restart the DHCP service in server or reinstall the
KX4 port driver on Server 2003 side]to this KX4 interface [Peer to Peer]
network, the Client Port [Win XP-SP2/SP3] is settling down with the IP from
DHCP.

Is this issue caused by broadcast server pkts from Server 2003 or requests
from XP- SP2/SP3???