I just installed XP on a PC and everything seems to be working fine except accessing the Internet. I disabled XP's IFC and set up the home ntwk. I can see and share files btwn all other PCs on the ntwk, and I can also ping internet sites via the Run command. However, IE cannot seem to access any sites and Windows Updates gets stuck looking for a connection.
What type of internet connection are you using? Check your PPoE settings if it's DSL. If you're using cable check to make sure that PPoE is not set on your router. Also, make sure that in the connection tab of internet properties that "Automatically Detect Settings" is the only thing checked off. Another thing you can do is right click on My Network Places and click properties. Right click on your network connection and click disable. Then right click on it again and click enable. This will reset some of your ethernet and internet settings.