Yes explorer.exe has been documented as accessing M$ for a while now, no you cannot turn it of because explorer.exe is required for Windows XP to run properly.
Yes it is in the EULA that M$ can access your machine and your machine can access their servers whenever M$ want. Of course you wouldn't know this unless you read the EULA, and if you actually read the EULA then you have already agreed to it, and have no choice but to accept it - unfair and wrong YES, legal - YES, unless it is challenged legally and found to be illegal.
Oh and if you updated with the service pack you have also given them the right to access your machine, stop you using it and monitor what you use, where you go, and anything else that they want, and you have given them the right to change the agreement without notification to you, and without agreeing to this you cannot update the security requirements.
[ February 11, 2003: Message edited by: Linux Frank ]