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Hey Timmy
Strangely enough, I have just experienced the same problem you described and I have upgraded to IE7 recently.
I did contact my ISP immediately and we went through every single trouble-shooting trick in the book, all to no avail. My ISP is NTL and as they use MAC addresses with their cable modems, it was possible to identify my presence online, yet we were absolutely unable to ping another site.
I have fixed the problem now, simply by performing a full format and reinstall and of course avoiding IE7 like a plague. I have since been advised that many people are having this problem with IE7 and only a few of them have been able to get browsing capabilities back by using System Restore.
In my very humble opinion - IE7 is to blame. I hope this helps you to resolve the problem.
spadeboy
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