Bakkasan, looks liek you ahve an existing browser hijack installed. Try this to remove it:
Step one. Download and run Ad-aware from www.lavasoftusa.com making sure to get the latest spyware filter updates after you run it.
Next run a search for any "hosts" files that may have been created on the machine. Chances are they are not needed, so rename them to something other than hosts for the time being so they won't be active.
Next in internet explorer go to Tools: Internet Options. On the General tab, Click on Delete cookies; Delete files (delete all ofline files is Checked); click on the settings button, go to view files (delete anything in that directory) then click view objects (Also delete anything in that directory). Click Clear History.
On the security tab, Select Internet and then click on custom level then select Reset to: Medium and press the reset button.
On the Content tab, click Clear SSL state
On the Connections tab, if you are connected via a network card, click on the LAN button. If the Proxy server section has any content in it, or is checked, uncheck and delete all information.
On the Programs tab, press the Reset all web settings button
On the advanced tab, click the restore all defaults.
Now go to Start:Run and type in ipconfig /flushdns
After that, restart the computer and see if it will connect to the internet when it restarts. If it will, great. If it won't there is probably still another registry key that is messed up. The easiest way to fix that will be to grab a new copy of internet explorer (you can get IE 6 off the windows XP cd) and install it over the existing copy.
That should reset most vectors of problems. If not, it may be in the VxD's or the registry. Easiest thing to do at that point may be to just reinstall windows. Running "Hijackthis" could also help.