The only thread I can find between the two may be that you are having network communication issues. How good is your speed to the internet (there are lots of tests around the web for that)? Does your firewall or router block certain sites or ports? Can you get a game playing in online multiplayer without much problem? (You can try the Unreal Tournament 2004 demo; it has several good maps for testing purposes, or any other heavy duty games that require fast communication online).
Daemon tools has had a history of issues with Vista, and may have some more with Windows 7, so you may want to be careful with it. If all you want to do is mount .ISO files as drives, there are some leaner and less intrusive tools. Daemon Tools do provide some excellent diagnostic and developer features, but most users don't need or use them.
So now you did a reinstall of Windows 7, and no more activation problem, but now have problems talking to MSN/Live servers? Make sure you are using the latest Live Messenger and such. I haven't seen any outages recently from MSN/Live, so I don't think it is on their end. Can you give us any more information or symptoms to work with? Otherwise, how is Windows 7 treating you? Are you using the RC (build 7100) or a leaked build (be careful with those)? Only problem I had so far was getting my TV capture USB stick working and also my Wi-Fi adapter. Just using the Vista drivers solved that issue. Otherwise I have been doing pretty well under Windows 7 RC.
Kurtis Whittington - Microsoft Windows Client Team