The Dlink wireless DWL-120 comes in four different versions. If yours says H/W D1 then you actually have a DWL-120d and need this driver for Windows XP because the driver on the Dlink site will not work in Windows XP (even though it says it will).
If you have tried the other driver, go to Add/Remove Programs in the Control Panel and uninstall it first. Then unzip this file and run Setup.exe. Once setup is complete, there is no need to reboot the computer. Just go into the device manager and update the driver for the "USB Device" and point it to C \Dlink\XP.
Now it will work.