Without knowing the actual application we can't say for sure. However, there were some updates in SP2 that did cause some programs not to work or work properly until the vendor's upgraded them to work with SP2. This program may be one of those.
Windows has a "compatibility mode" that will allow you to run, for example in Win98 compatibility mode. If you have an icon on your desktop for the program, RIGHT click on it and then Left click Properties. One of the options will be the compatibility mode.
However, to be truthful, If something would not run in native Windows XP mode, I never got one to run in a compatibility mode.
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