I just installed Zone Alarm firewall from downloads.com & i have the latest norton antivirus 2003 updates.
What else do i need to do to secure my computer?
Also i have a question. Now that i have a firewall will i be able to transfer my files through my network?
It doesn't work if i unable the firewall that windows xp has

I keep getting win32 wants to act as a server or something like that.
I keep doing yes and don't ask me again.

Safe?

if its actual xp services used by xp your faily safe but do a search n google for any your not sure of to make sure your not letting any trojin acess your computer.

I do not let any program act as a server. Win32(Generic Host Pro) is a required Microsoft Service and it needs to be granted access, but not server rights. Be sure to read the help files by clicking the circle that is blue/white?HELP at the top right if you have any configuration questions or problems. A good thing about Zone Alarm is that it is easy to configure and also easy to make changes to your settings should you make a mistake.

I clicked yes when it asked win32 to act as a server

If you want to make changes, and see what the programs are set for, just open Zone Alarm>right click startup icon>select RESTORE ZONE ALARM CONTROL CENTER and select programs. You can use your mouse to set and configure PROGRAMS to suit your needs/wants.