Have you tried contacting HP regarding this? If so what did they say? That would be my first line of attack.

It is strange that it works fine when on batteries but won't work under AC power..

YOu have hit all the major things I'd suggest, from the BIOS settings, IRQs, port addys, power management, etc...

The only other thing I could think of is a reinstall of XP? But I doubt it will work. This could just be a hardware incompatibility.

Have you tried running a different version of Windows on the laptop to see if it works. If it works with a different OS, then you know it isn't a hardware problem. But if it doesn't then you know it is hardware problem...

Sorry I couldn't be of more help.. perhaps someone else has a more fruitful solution.