Greg, Chuck's suggestion to contact support for the other Windows Live applications is sound. However, I think you may want to try checking your IE settings. Tools/Internet Options/Connections. Make sure that "automatically detect" on the LAN Settings dialog, is not checked.
A more brute force approach in IE7 is to go to the Advanced tab and select the option to reset everything to default.
Since you have encountered the same problem with OneCare installed, the firewall off, and OneCare removed, I believe it is a problem with your connection settings. Best of luck to you,
-steve