I haven't got a clue why, but my PC just started working again
I gave the base unit to a local PC repair shop and after a couple of days of testing, the technican there concluded that the motherboard was dead and needed replacing.
I bought the base unit back home, connected it all up, pushed the power switch and for some mystical reason the pc booted up perfectly.
Since then i have fresh installed a clean copy of Windows XP and so far so good, there haven't been any "No Connection" messages
I have to say a BIG THANK YOU to weedougie, gregtherotterius and ripit for helping me, guiding me and offering suggesstions. Thanks alot guys or gals