A friend of mine called me and had an issue with her laptop and I'm not really sure what it could be. The keyboard suddenly stopped responding, but everything else works. She can use her mouse, get on the internet, etc. Windows still recognizes the keyboard, and yet the keyboard does not turn on the led's for caps lock, num lock, etc. I had her uninstall the keyboard and then xp loaded the new drivers for it upon restart. I cannot figure out if this is a hardware issue or a driver issue. If anyone has any ideas about which it is or a way to further test it, I'd be most appreciative.

well the kbd hardware is built in but the kbd ist self is additional hardware, the kbd cable might be unhooked or the kbd might be bad etc etc

try resetting the BIOS for the keyboard. its how a friend of mine fixed his quick keys when they wouldnt change to what he wanted them to be. windows, like you said found updated drivers for him and everything was good to go.