Difficult to answer your first question as you give no useful details, specifically whether you are connected to the Internet via wired or wireless connection. Limited connectivity is not particular to Vista at all...
Replacing Vista with XP is simple enough - essentially, put the XP CD into the machine and reboot. You will then be given the option of installing XP and, when prompted, tell it that you want to erase the existing partition.
Three things:
1) make sure you have all of your data backed up - once you wipe the Vista partition, it's (essentially) gone;
2) your existing XP licence (almost) certainly does not allow you to install it on more than one machine at a time;
3) XP is no longer supported by Microsoft for non-corporate customers - this may or may not be important to you. I can understand that you don't like Vista but, assuming you want to stay with Windows rather than e.g. moving to Linux, I would urge you to upgrade to Windows 7.