try adaware, I've seen where spyware will block access for IE, but as soon as you work witha different browser its fine.
For instance my roommate came to me saying his PC couldn't get online (cable modem)
So I went downstairs, I could open IE fine but it wouldnt' go out and get the webpages.
Checked, and I could ping and resolve names from the net so I knew it was working.
I downloaded Opera via FTP, installed and ran that.. up and running as expected. IE was still dead in the water though.
ran adaware through it, and IE was running again after cleanup and reboot.