There is a very common problem (bug?) with Vista's networking where a network adapter can connect with "Local" but not "Internet" access. I haven't, unfortunately, come across a definitive solution to the problem. It is discussed in this
Microsoft Article although no solution is offered.
It appears to arise in computers with more than one network adapter installed, so that Vista is unable to determine which adapter should be providing internet access. If you have more than one adapter ("Local Area Connection" and "Wireless Network Connection"?), try disabling whichever is not being used.
If that doesn't work, go into Services ("Start > Run", type
services.msc and click OK), then disable:
<ul type="square">[*]Network List service[*]Network Location Awareness service[/list]Doing this will give an indication in the Notification Area (System Tray) that you don't have a LAN or Internet connection, although it should actually still work.