The other thing MS suggest is resetting IE security settings to default. MS detail the manual process and also have a fixit button to do it automatically - http://support.microsoft.com/kb/917925
gzt - downlaoded latest IE8 just in case ... no go. Also, the install stops if you uncheck the malicious software check & installs. Can't see anyway around that.
Back on the original problem, how about disabling the windows dns client cache completely and see if that makes a difference. If that works try disabling negative caching only.
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