try a clean install of Windows XP SP3 and see if that solves the issue.  if you have data on the current hdd you do not want to lose, try a different hdd for this test.  chances are it is due to a bug in XP.

A clean install of WinXP would involve many hours (10+) reinstalling all the programs I have and use on the desktop.  Do you have a reference to the WinXP bug that you referred to?

In the meantime this standby problem has become intermittent.  Sometimes standby works properly.  But when it doesn't, I find that often the computer won't shut down either and I end up having to hold the off/on button down for ten or twenty seconds before the computer turns off.  When this no shut down occurs, the screen will stay on the computer is shutting down screen.  If I hit Cntl/alt/del it might do to another screen but never continues to shutdown.

I'd like to try some troubleshooting ideas that are less draconian than a clean install, which may not even fix the problem.

try replace cmos battery with a brand new CR2032, and also clear cmos settings by motherboard jumper reset.  many strange power management issues on PC seem to be caused by corrupted cmos settings. 

I retract the statement of XP bug.