From the command prompt type:
If this works (you get a response) try:
If this works, and IE is not, then IE is not pointing at your default gateway (a system-wide setting that says "anything to do with the internet: ask this computer"). In Internet Explorer go to Tools->Options->Connections->LAN Settings, and make sure it's not set up to use a proxy.
Other info that would help: what type of connection is your friend on (e.g. Uni LAN, 56K dialup) and what does typing "ipconfig /all" at the command prompt when you're connected