I have exactly the same problem. I installed Windows XP's Service Pack 2 a few weeks ago. Since then, whenever I search a video file that is currently playing, the volume immediately goes way up. It normalises itself when I adjust the volume even a little bit.
Just like the previous poster said, this is extremely annoying - to the extent I'm also considering switching players to something else that doesn't have this problem.
For additional information, my soundcard is Creative Labs SoundBlaster Live! 5.1.
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