"Page could not be displayed" sounds like it can't reach the server at all. Do you have any firewall software installed? Is the Windows firewall active? I believe it comes with SP2 and is pretty strict. Try disabling it, or find out if you need to configure it to allow IE7 to access the internet. Maybe something went wrong there when IE7 was installed. The firewall is about all I can think of if everything else works.
There is a quick fix for your automatic updates problem: if you set the Automatic Updates software to "download updates for me, but let me choose when to install them" you can tell it to ignore IE7 in the future. Make sure you don't click "install all updates" or such when you receive a notification. There is a button that takes you to a screen where you select which updates to install.
Don't be a jerk.
Hey finally something on this site I might be able to help with...
I agree with Kris, it is likely a Firewall problem, the easy way to check is the good old fashioned PING from a DOS prompt, try the following,
1- Click the Start Button select Run
2- enter CMD in the dialog Box
3- A DOS - Command window appears
4- In the Command Window enter -> Ping
www.crius.net (or any other web site URL)
you should get a result similar to this;
Pinging crius.net [67.19.46.119] with 32 bytes of data:
Reply from 67.19.46.119: bytes=32 time=1910ms TTL=49
Reply from 67.19.46.119: bytes=32 time=99ms TTL=49
Reply from 67.19.46.119: bytes=32 time=98ms TTL=49
Reply from 67.19.46.119: bytes=32 time=98ms TTL=49
Ping statistics for 67.19.46.119:
Packets: Sent = 4, Received = 4, Lost = 0 (0% loss),
Approximate round trip times in milli-seconds:
Minimum = 98ms, Maximum = 1910ms, Average = 551ms
If you get a "Ping could not find Host" or "Request Timed out" I would say you are being blocked by your firewall.
Personally I have found Zone Alarm Free Edition better for home use than the Microsoft Firewall, Zone Alarm has a "Game Mode' which allow you to activate it and it will automatically accept all traffic from the site you are on, great for online gaming. Just Google "Free Zone Alarm" and give it a try, if you do make sure to disable Microsoft Firewall you really do not want 2 firewalls running together it can cause real headaches.
I hope this is not insulting if you already knew all of this stuff, I do not know your level of computer experience, and I am used to dealing with "Stupid User Tricks" all the time in my job so I always try to go to the lowest common denominator when I explain anything.
Hope this helps