The problem is that many programs (such as all IE and other browers) cannot access the network. But let me explain before you get the wrong idea.
I am quite familiar with networking in general, so I can tell you that the outgoing network traffic is not even reaching the network hardware interface. In looking into the problem, I am using Wireshark to monitor network traffic. What happens is that some programs can send packets out (and thus receive responses) but others cannot. For example, anti-virus programs cannot update themselves, but PUTTY can reach anything I send it to.
Tech Support Guy System Info Utility version 188.8.131.52 OS Version: Microsoft Windows XP Home Edition, Service Pack 3, 32 bit Processor: Intel(R) Core(TM)2 Duo CPU E4500 @ 2.20GHz, x86 Family 6 Model 15 Stepping 13 Processor Count: 2 RAM: 1023 Mb Graphics Card: NVIDIA GeForce 7300 LE, 512 Mb Hard Drives: C: Total - 476929 MB, Free - 437737 MB; Motherboard: ECS, GF7050VT-M, 1.0, 00000000 Antivirus: avast! Antivirus, Updated: No, On-Demand Scanner: Enabled
Originally I had McAfee Internet Security installed. Suddenly one day, McAfee was unable to update itself, and IE (and other browsers) stopped working.