Microsoft released a broken update for Windows Defender (at least on Vista) earlier this month that detected the "127.0.0.1" line in the hosts file (which has been standard since time immemorium) as a threat and removed it. This broke all manner of things from Hotmail to VMWare.
Microsoft has since released an update to address this issue, but I don't see an apology from them anywhere for the grief they caused through the release of this untested update.
Anyway, now you have one more thing to look at to see if this is the cause of multiple sorts of network issues that you may be seeing aroung now.
Regards,
The Outspoken Wookie
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