For the last several months I’ve been having Windows 2003 Server Pack 2 applied to all SQL Server in my envronment in order to bring them inline with a single build and have ran into an issue with Windows Server 2003 Scalable Network Pack (SNP). Windows 2003 SP2 introduces the "helpful feature" of the TCP Chimney Offload Engine (TOE.) The TOE feature is supposed to increase performance by allowing some TCP functionality to be handled by the network driver/adapter instead of the Windows TCP/IP stack itself. This functionality is enabled by default in Windows 2003 Service Pack 2.
Unfortunately several systems I support had quite the opposite effect and I noticed issues of network latency, unable to connect and high paging. Several people have blogged about SNP/TOE issues in SQL Server and Exchange environments. I even saw a tip to disable TOE in the PASS 2008 Summit session, "SQL Server Tips, Tricks & Techniques from Inside Microsoft ," I haven’t seen the issue on every SQL Server just some of the more active ones. Once TOE was disabled the problems went away.
Lession learned — You should always disable TOE. The risks in not doing so far outweigh any potential benefits. The easiest way to disable TOE (or more accurately the problematic features in TOE) is to immediately apply Hotfix 948496 after installing Windows 2003 Service Pack 2.