The above symptoms are isolated to a missing Windows XP SP1 registry key.
NOTE: This is a known Microsoft issue (Knowledge Base Article 823348) and is not limited to HP products.
To correct the above issue the following needs to be added to the Registry:
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\GraphicsDrivers\LidCloseSetPower
WARNING:
Modifying the Registry could cause serious, system- wide problems that may require you to reinstall Windows to correct them. HP cannot guarantee that any problems resulting from the use of Registry Editor or Registry Patches can be solved. Use these tools at your own risk. HP recommends setting a Windows Restore Point or to backup the Registry before modifying the Registry.
For information about how to edit the registry, view the "Changing Keys And Values" Help topic in Registry Editor (Regedit.exe) or the "Add and Delete Information in the Registry" and "Edit Registry Data" Help topics in Regedt32.exe. Note that you should back up the registry before you edit it. For information on how to backup the registry view the "Backing Up Registry" Help topic in the Registry Editor (Regedit.exe) or "registry keys: saving to files" Help topics in Regedt32.exe.