OK, I just found out that this error was caused by a corrupt winsock and typing in
netsh winsock reset
will fix the corruption. A reboot is required.
However, after doing this, I was able to connect to the dhcp server and get an address, but I still cannot get on the internet.
I can get to places via the ip address, but not via the www. I changed my dns servers to 2 different ones (both are known to work) and neither of them are working.
Ideas?
BTW, that answers was at http://support.microsoft.com/?kbid=811259