Hi
I'm 90% sure you have a virus, or more correctly a Trojan.
Have you had any messages about updating your virus protection or anything like that lately.
Make sure you do the things that Mitchell suggested!
Try and go into internet options and see what your LAN setting are set to.
Try setting them to automatic and see if you can download things again.
You will have to remove the Trojan some how.
If you can get it to read a USB drive in Safe Mode try this...
Download "SuperAntiSpyware" on another computer and install it on a thumb drive.
SUPERAntiSpyware.com - Downloads
Chose the free one.
Start your computer in safe mode and run a scan from the thumb drive.
If it finds the trojan or more likely several, tell it to remove them.
If you don't find anything then we'll go from there.
If you have files on your computer that you can't afford to lose now is the time to back them up. Load them onto a DVD, Thumb Drive or External Hard Drive.
If this fails you will have to try and do a Windows Repair Installation, This may get your computer working but may not eliminate the virus. You will still have to do the SuperAntiSpyware thing.
If that fails you will have to do a clean installation of Windows (as a last resort). That's why it is important to back up your files while you can still get into your computer.
If you get to the point where you can't get into your computer things get a lot tougher.
Mike