Have you done a restore point as yet? Set it back to where you know you were not having problems. (It would be an excellent idea also to do an online malware scan, F-Secure, Panda, Trend Micro Housecall.) After setting a restore point, I'd download Mozilla Firefox and see if you can download Norton Updates from there. If your subscription to Nortons is almost up, consider a free Anti Virus like AVG. PCGUIDE.com forums and Sysopt.com forums have excellent reviews of the different products. By chance you didn't download Antivirus 2009? This is a definite malware program.

Please download Malwarebytes' Anti-Malware to your desktop. Click here
Double Click mbam-setup.exe to install the application.
 Make sure a checkmark is placed next to Update Malwarebytes' Anti-Malware and Launch Malwarebytes' Anti-Malware, then click Finish.
 If an update is found, it will download and install the latest version.
 Once the program has loaded, select "Perform Full Scan", then click Scan.
 The scan may take some time to finish,so please be patient.
 When the scan is complete, click OK, then Show Results to view the results.
 Make sure that everything is checked, and click Remove Selected.
 When disinfection is completed, a log will open in Notepad and you may be prompted to Restart.(See Extra Note)
 The log is automatically saved by MBAM and can be viewed by clicking the Logs tab in MBAM.
 Copy&Paste the entire report in your next reply.
Extra Note:
If MBAM encounters a file that is difficult to remove,you will be presented with 1 of 2 prompts,click OK to either and let MBAM proceed with the disinfection process,if asked to restart the computer,please do so immediately.

I would suggest you go into your IE settings and go to your add ons disable them one at a time and see which one is causing you this problem then just keep that particular one disabled or remove it. that can happen with add ons unfortunately in IE.

If you do not have a second browser like firefox I would also advise getting it to have on your pc handy should you have a problem with your IE you could still get online using firefox and once you start using it you will love it and it is safer too.
I do not understand however how this problem with your IE could cause your Norton not to update? How do you connect to the internet? DSL? fios? dial up? with a constant on connection your Norton should have full access to update.

To make sure you do not have malware could you please download and install malwarebytes update it run full scan and post the results.
Malwarebytes' Anti-Malware
download Malwarebytes' Anti-Malware to your desktop.

* Double-click mbam-setup.exe and follow the prompts to install the program.
* At the end, be sure a checkmark is placed next to Update Malwarebytes' Anti-Malware and Launch Malwarebytes' Anti-Malware, then click Finish.
* If an update is found, it will download and install the latest version.
* Once the program has loaded, select Perform full scan, then click Scan.
* When the scan is complete, click OK, then Show Results to view the results.
* Be sure that everything is checked, and click Remove Selected.
* When completed, a log will open in Notepad. Please save it to a convenient location. The log can also be found here: C:\Documents and Settings\Username\Application Data\Malwarebytes\Malwarebytes' Anti-Malware\Logs\log-date.txt
* Please post the contents of that file in your next reply

LOL darn zep you were faster at the draw this time. hahha

As log as the user gets the message Then we are are good.

Thanks Raven

Curious to see if she can connect to any malware download sites.

And one other option is to switch browsers. I'm not a Microsoft basher, but I gave up on IE a couple of years ago when updates started causing problems. Mozilla Firefox is, in my opinion, a much more capable and faster browser, and you can copy all of your bookmarks to it in about 15 seconds. I think it also functions better with blocking popups, and there are many useful widgets and add-ons available for it.

Consider giving it a try. You don't have to uninstall IE; just download the free Firefox, copy your bookmarks to it, and take it for a spin. If you don't like it, you can always go back to IE.

Here is a link that might be useful: Firefox download

Thanks for all the info and advice. I did a system restore to 2 weeks earlier today, and there were no changes. The problem started over the weekend. I have been wanting to examine the IE add-ons and don't know where to find them. Where do I find IE Settings? I'd like to start there.

P.S. I have highspeed internet connection with Comcast.

On IE7, it is here:

On the Tools menu, click Manage Add-ons.

Internet Explorer add-ons: frequently asked questions

Why would you wish to inspect the add ons that apparently have been working well till last weekend rather than scan the computer as 3 people have suggested? This is more likely the bad guys invading than any add on becoming corrupt on it's own.

Tell us which anti malware and firewall programs you use along with your Norton anti virus. Is this Vista or XP?

Since I can only open IE without add ons "manage add ons" is not highlighted. So, that option is out. I guess I'll have to do the scan. I have Symantec/Norton doing everything, and this is Windows XP.

Yes, do any of the scans suggested above. You will find they might take from 45 to 90 minutes depending on how large the hard drive is and how much data has to be scanned. Set it to run when you will not need the computer for a while.

I had asked about other safety programs as your opening post only said you had Norton anti virus. So you really have the full suite of Norton programs then?

Yeah, I guess so. My husband was in charge of all that stuff. Okay, good news bad news. Did the malware download and scanned, found 2 bad things and killed them. Bad news is IE will still not open normally.
Here's the malware report:
Malwarebytes' Anti-Malware 1.34
Database version: 1809
Windows 5.1.2600 Service Pack 3

2/27/2009 11:51:57 AM
mbam-log-2009-02-27 (11-51-57).txt

Scan type: Full Scan (C:\:)
Objects scanned: 163511
Time elapsed: 1 hour(s), 11 minute(s), 47 second(s)

Memory Processes Infected: 0
Memory Modules Infected: 0
Registry Keys Infected: 1
Registry Values Infected: 0
Registry Data Items Infected: 0
Folders Infected: 0
Files Infected: 1

Memory Processes Infected:
(No malicious items detected)

Memory Modules Infected:
(No malicious items detected)

Registry Keys Infected:
HKEY_CURRENT_USER\SOFTWARE\Microsoft\Windows\CurrentVersion\Ext\Stats\(b64f4a7c-97c9-11da-8bde-f66bad1e3f3a) (Rogue.WinAntivirus) -> Quarantined and deleted successfully.

Registry Values Infected:
(No malicious items detected)

Registry Data Items Infected:
(No malicious items detected)

Folders Infected:
(No malicious items detected)

Files Infected:
C:\WINDOWS\hosts (Trojan.Agent) -> Quarantined and deleted successfully.

So, what do you suggest I do next? Download Firefox, copy my favorite sites and delete IE?

No you just can't ignore the problem, you have to disable 1 add / on at a time and find out which on is causing the issue,

That being said you can still download firefox so you have 2 browsers installed.

zep516

See link please.

Here is a link that might be useful: Add ons IE

You had some pretty serious infections there so something is not working well in your security defenses or someone is not surfing smartly.
What antivirus, firewall, and malware programs are you running and are they current, do you run regular scans? are your windows updates current?

Keep that malwarebytes, update it and run it regularly for the next few days.
go here and run this online scan it does use IE
FREE Online Virus Scan

if you are unable to do that one try this one
Trend Micro's FREE online virus scanner

definitely go ahead and get the firefox so you have at least one good functioning browser.

Personally depending on what the online scans show I think you may want to go to one of the support forums and see if you need further cleaning efforts. We will see.

Let us know this info please.

lets also try clearing your cache.
go to Start> control panel> internet options>General tab>Temporary internet files> delete files apply ok

Also a good idea would be using ATF to get anything else out of there.

ATF-Cleaner.exe

and lets get spywareblaster on there now so we can start blocking some stuff.
SpywareBlaster
install, hit update, hit enable all protection so the shield turns green. This is a free program you do these steps once a week. There is no scan it just blocks some bad stuff from getting to your pc.

Looks like a false postive.If this had been a live infection there would have been much more detected .

Almost loos like a false postive,

If this had been a live infection there would have been much more detected .

Not a 100% though on this

Okay, more discoveries and info. I also have zonealarm as firewall and intrusion blocker. It seems to be working. The stupid Norton program keeps telling me I'm at risk, however states that liveupdate is running in the background, which should be keeping me current.
The info on how to get into add-ons while disabled was very helpful. I was able to disable and then enable one at a time various add-ons. I'm not finished but already have found 2 yahoo as well as sidestep (flight comparisons) add-ons causing problems. With various ones disabled I'm able to log into the internet normally. I did the ATF and freed up over 2000 whatevers. (did you figure out I've just enough knowledge to be dangerous?)
I may have time later today to play with these issues again, but for now have to go to work. Thanks all!!

that is very good progress you are making.
I can not tell you what to do but if you are not happy with Norton, and believe me you would not be alone, I would get it out of my pc and put in another AV program, in my opinion the free AVAST is superior and no where near the resource hog as norton is. There is a dedicated removal tool on the Norton site but if you check here at Corrine's Blog she lists the links.
Antivirus Product Removal Tools

if you want to look at the AVAST page here is that link
avast!
on the left on that page is an excellent user guide and install guide in pdf format to look at.
Keep us updated and hollar if you need help.

I would NOT trust the Norton currently to be protecting you if it is saying you are at risk!