Apparently, to reduce the spread of worms like Sasser, Windows XP Service Pack 2 will limit the maximum number of TCP connections your computer can have at one time. I can see what they are thinking, but I wont mind unless some of my applications (like my multi-threaded port scanner) wont work correctly with this new setting. I guess I'll hold off on increasing the max. untill an application generates an error because of it.
Here is a registry edit you can do to increase the max:
Value Type: REG_DWORD - Number
Valid Range: 0 - 0xfffffe
Description: This parameter limits the maximum number of connections that TCP can have open at the same time.
TCP/IP and NBT configuration parameters for Windows XP: http://support.microsoft.com/default.aspx?kbid=314053