network internet conflict

My Vista box is a workgroup with several XP boxes. In the Vista box's Control Panel - Network and Internet - Network Map, it shows [my computer's name] -- Gateway -- Internet. There is an exclamation mark in a yellow triangle between my computer's name and Gateway and a red "X" between Gateway and Internet. If I double-click on the triange or the red "X", Vista does a diagnostic and then displays 'The network adapter "Local Area Connection 5" does not have a valid IP configuration'. This implies that I do not have an internet connection. (Yes, I set my internet connection LAN options to use a proxy server)
Also I do not know why there is a Local Area Connection "5" unless this is due to Vista finding 3 other computers and the server (total of 4) on at the time when Vista was installed.
When clicking a link in one of the screens I was looking through, I got the message that the MS page it was trying to access could not load due to non-connectivity. However, when I clicked the "These newgroups" link in the "How to share feedback" screen that I eventually located, the accessed the internet immediately and accessed this forum. I then tried to activate IE7 independently and it also accessed the internet. Yet Control panel still implies that I do not have internet access.
Also, although I can see the other computers on the network that are sharing, I have yet been able to access them from the Vista box and I am not sure I can always access the internet. Any ideas what I may be doing wrong?
One other item, I have not seen an acknowledgement that activation has happened. I did see one check block during install that said to activate automatically, so can I assume that Vista was able to get out on the internet at that point and activate the installation? -- McSha