Corruption Issues
One major common issue with LSPs was that if they were to be removed or unregistered improperly or if the LSP was buggy, it would result in corruption of the Winsock catalog in the registry, and the entire TCP/IP stack would break and the computer could no longer access the network.
LSP technology is often exploited by spyware and adware programs in order to intercept the communication across the Internet. For example, malware may insert itself as an LSP in the network stack and forward all of the user's traffic to an unauthorized external site, where it can be data-mined to find the user's interests to bombard him/her with targeted advertisements, as well as spam e-mail. If a malware LSP is not removed correctly, older versions of Windows may be left without a working network connection.
Such potential loss of all network connectivity is prevented in Windows XP Service Pack 2, Windows Server 2003 Service Pack 1 and all later Windows operating systems, in which Winsock has the ability to self-heal after a user uninstalls such an LSP.
Read more about this topic: Layered Service Provider
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