The PC has two options to connect to the Internet: LAN (through router etc etc) and dial-up. On either option, it connects, but cannot/will not browse.
To make matters even more interesting, the PC's DHCP client is not working - when connected to a LAN it automatically assigns itself a 169.xx.xx.xx address, with a class B subnet mask (255.255.0.0). Our DHCP server is configured to assign class C (3x255) addresses, in the 192.168.0.x range.
Windows repair didn't help. The OS is windows XP professional.