So today I discovered why my notebook was failing to hibernate when I closed the lid on Windows XP, thanks to Scott Hanselman.
Scott’s article can be found here.
The bug affects all computers that had more than 1GB of RAM. Microsoft finally released a hotfix to the problem here http://support.microsoft.com/?kbid=909095
Why did Microsoft wait so long to release this to the public? It appears they had this available for awhile, but you had to call PSS to get it.