The router gives both computers a hardware firewall (NAT firewall) that hides both of them........ The XP SP2 and SP3 firewalls are software firewalls (albeit only one way firewalls), and having a hard and software FW is not a problem..... Actually, many tech sites indicate with that combination you don't even need another software firewall as it is entirely unlikely you would have something sent out from your computer, except if you use an infected disk from someone elses computer or buy one of the infected rogue disks from China that are popping up with freguency.......
But, the golden rule of computers is no 2 active software firewalls (just like no 2 active AV programs) should be run at the same time as they interfere with each other and give you headaches..... You can use your Norton FW and turn off the SP2 firewall in the Control Center, if you trust Norton.... but that is another subject.........
One explanation for the difference you noted is you are talking of two different Norton products..... did they both contain a firewall along with the AV protection (like a suite of programs)??. From memory, Norton AV the older program did not have FW, while the newer suite of programs called Norton 2005, 2006, 2008 did contain firewalls......... so you didn't have the conflict of 2 firewalls with your product, but your wife would have the conflict.......I won't use Norton so have no products to refer back to, but you can look on your box for the 2 products and verify whether each had a FW included..... And, your XP Pro is the more robust of the 2 WinXP products... it actually provides additional abilities for laptops, not provided to desktops........
Hope some of that info helps........ pardon the opinion part, just have seen way to many problems from Norton, later Symantec, and most tech sites are also now noting those problems of a formerly decent product that has become a problem child........