Test for the problem:
1. Get to a command prompt by going to Start > Run, and entering
cmd.exe
2. Run
ipconfig within the cmd.exe window
3. Pay attention to "Ethernet Adapter Local Area Connection." Should be the second one down.
4. Compare the IPv4 Address, Subnet Mask, and Default Gateway to that of another computer which is hooked up to your router where the Internet actually works.
5. Subnet Mask and Default Gateway need to match those of the working computer. IPv4 Address should NOT, or else neither will work.
Solution:
1. My Network Places > Network Connections
2. Right Click "Local Area Connection" and select Properties
3. Select "Internet Protocol Version 4" and select Properties
4. Make sure "Obtain Internet Address Automatically" and "Obtain DNS Automatically" are selected.
5. OK to save any changes.
What Microsoft has to say:
To configure TCP/IP for automatic addressing
APIPA is what is getting in your way, the term escaped me. There are guides to actually turning it off, such as:
Disable APIPA on Windows XP to speed up troubleshooting | TechRepublic