Odd problem with IE.

I'm doing some work for a friend, on an old PIII 450, 256 ram, machine running XP pro. The problem was no internet access, but MSN messenger worked. When I got the machine, I found, that Adaware would update, AVG would update, so I tried some of the favourites, and they would work. the home page doesn't work, nor does google, or this site. I managed to get Service Pack 2 onto it, and all the other critical updates. When I tried to go back to Windows update, it came up with the not found page, and in the tool bar, it said syntax error. I was going to download Firefox, but it won't go to mozilla. A spybot scan found 26 problems, and there is an icon that looks similar to the windows security icon, that keeps opening to say there are vulnerabilities and p[roblems, and to do a free scan with ultimate fixer. I can't find it to get rid of it. At this point, I believe the easiest fix would be a reformat, but I'm open to any ideas, as I would like to know what is going on here. When I tried to download IE 7, it said it couldn't download because of the security settings. I turned off Zone alarm, windows firewall, and lowered the security setting to the lowest, and still the same message. So, any suggestions would be welcome, and thanks for reading this.