As noted in this forum in the thread "WARNING: Update 969947 may prohibit
establishment of an RDP session on Windows XP" from 11/10/2009, Windows XP
may freeze during login in an RDP session. Some users noted that there is a
Known Issue (as described in http://support.microsoft.com/kb/969947
involving the ATI Radeon HD 2400 series video adapter. However, the test
system on which I had this problem has an nVidia GeForce 7050/ nVidia nForce
610i integrated on a Biostar GF7050V-M7 motherboard. However, it's video
driver was not the latest.
Taking a cue from the problem with the ATI hardware, I removed the nVidia
video driver, rebooted, and installed the newest driver available from the
nVidia site (v191.07). That solved the problem with the 969947 update. I
can now log in via RDP normally.
I guess you could say that this issue is now "Known", too.