This happened to me when I first installed win 7 and then again when I updated Ethernet drivers.
My first fix was to reboot the router but it carried on disconnecting. A couple of reboots later and it was fixed.
I didn't do anything other than reboot a few times. Wierd.
Firefox stopped working for me I now have it uninstalled.
When it updated to 3.5 it just hung on google. Everyone said it was my addons which is strange as my 2 XP machines at home and my XP machine at work all have the EXACT same addons and firefox runs perfectly on them.
I tried deleting my profile and cache and it fixed the problem for all of 2 minutes until next time I did a google search.
TBH I have limited time at home on the PC and it's just easier to use IE8 than to spend days trying to figure the problem out.