First off, I will address the Original Post since only one other person has really tried, and his way isn't something a newbie could do without a bit more explicit instructions (most users don't even know what a hosts file is, more or less where to find it, or the syntax contained therein).
This sounds like a DNS issue, which would be a problem with the internet provider, or with the IP Settings on the computer. At a command prompt, type
IPCONFIG /ALL and hit Enter. This should list all the network cards in the machine, and tell you how each of them is configured. You are looking for one that shows it is connected, and has IP information showing. Make sure they have an address (or two, or three, or more) listed under "DNS Servers." If they do not, then this is most likely your problem. Right-click on the Network icon on the desktop, click Properties, and on the left, click "Manage Network Connections." In the window that comes up, right-click on the network adapter you are using, and select Properties. In the list, find TCP/IP v4 and double-click on it. In the settings box that appears, make sure the radio button for "Obtain DNS server address Automatically" is selected. If it is not, you will have the problem you see now.
Another cool thing you can do to check if your ISP's DNS is working, is to go to a Command Prompt and type
NSLOOKUP and hit Enter. This will connect you directly to their DNS server so you can run some checks... every address you type, it will tell you the IP address of it... for instance, if you type
www.google.com it will show you a list of the IPs of all the servers hosting the
www.google.com website. Try a couple sites, do they resolve to an IP ? If so, type exit to get back to the command prompt, and try pinging that IP it gave you.
Ok, now that I said all that... people who are still hating on Vista are only doing so because they like whining. It is now a mature technology and works just fine. The reason it has such a high overhead compared to XP is that it is designed from the ground-up as a virtual OS. No programs directly affect hardware anymore. They all interface with virtual devices to get their work done. Now, this isn't something the typical computer user cares about in the least, so if XP runs faster on your old machine... go ahead and use it. If you have a more modern computer whose drivers are made to be virtualized, you will not notice much of a performance difference at all between Vista and XP unless you run all the extra pretty stuff Vista added. Also, people who say "Switch to Linux" are kidding themselves. If all you want a computer for is to browse the web and IM, and don't mind beating your head against a wall to get the simplest of computer functions running, like the scroll wheel on a mouse... sure, go with Linux. Christ, most PHONES can do that now people ! If you want an OS that is actually capable of playing a new game that comes out or running some hot new software that was released without having to download and recompile a new Kernel to fix some bug that makes WINE not work, stick to Mac or Windows. I don't know about most people, but I prefer spending more of my time using my computer to do what it was built for, rather than re-building my computer to the things I use it for. Linux is made for computers that perform singular, highly focused services. It is not a mature Desktop technology (no matter how much Novell or RedHat want to tell you otherwise). Anyway, the problem the OP is having, has nothing to do specifically with Vista. In fact, I would go so far as to say over 95% of the people having problems with Vista are having hardware issues, or driver issues from hardware manufacturers who don't Quality Control their drivers well.