I'm running Windows XP Home Edition Version 5.1 (SP1) and I've been using McAfee Security Center (with Personal Firewall, Privacy Service, and Virus Scan) for a few years without much problem; I get the automatic updates and yearly renewal. A couple of weeks ago, it tells me to go to the McAfee site and download new versions; which I do. Since then, I've been having intermittent problems ( Explorer will crash sometimes, kick me out and then I've seen problems with cookies). This weekend, it seemed to get worse; web-sites I've been into before won't let me in because it states that cookies aren't enabled. I'm sure they still are (Internet Options, privacy is set to medium and in the web-site's "edit" section, these web-sites are set to allow cookies) but I check and they still are. I then check McAfee Perental Controls and find the same thing (all these sites are still set for enable cookies and allowed access). So I try to go on the McAfee web site to get support and IT tells me I don't have cookies enabled. I finally give up (after trying everything I know how to do) and I go into Control Panel, Add/Remove software and uninstall the Privacy Service portion of McAfee - Lo and behold, I can get back into sites I was locked out of, including the McAfee support. So in I go and select the chat with a "technician" because if you want to talk to a real person, it's $2.95 a minute (WOW what a rip-off). So I wait my turn and finally get this guy and for the next 3 hours he tells me pretty much nothing, with long time-lapses in between each response. He wants to tell me how to set up Internet Explorer for cookies (which I try to explain I already know how to do) and then he wants me to re-install his software. I tell him I can't do that because if I do, I'm locked out of his "support" site. This goes on and on until finally I can't stand the frustration any longer and end the session.

At this point, I'm wondering if anyone else has experienced problems like this with McAfee's Privacy Service and if so, do you know any tricks I can use to fix this problem? Or, am I just chucking good money away by sticking with McAfee?

The issue is most likely being caused by the Privacy Service portion of McAffee.  One of the things that this service does it to block cookies from various sites in an attempt to increase your privacy.  You may want to check the setting of the Privacy Service to see what you can find, and disable this service if necessary.

First party cookies are not nearly the threat to privacy that many people have come to believe.  Spyware and Adware are the real threat to your privacy, and your anti-virus and firewall portions of Mcafee should be providing a good defense against those.