Cannot make an HTTP connection

HTTP: Error 12031 connecting to www.microsoft.com.  The conneciton to the server was reset.

The problem system is a Win XP2 Pro SP2 connected wirelessly to network router.  All other systems connected wirelessly to this router are working correctly.  The

problem system was apparently doing its overnight AVG update which did not complete.  When I first saw the system, the next day, the user complained she could not get

on the internet (IE7), nor could she read E-mail (OE) nor could she get the AVG to complete the update.

From the IE7 "Unable to display this page" screen she ran the network diagnostics wizard and got the following results: HTTP: Error 12031 connecting to

www.microsoft.com: The connection with the server was reset.  Error could not make an HTTP connection.  
Got Same message for HTTPS and FTP.  
Suspecting a firewall port problem I ran a SET PORTOPENING PORT = 80 MODE = ENABLE SCOPE = ALL PROTOCOL = ALL  and the same thing for Port 443 (HTTPS)

and Port 21 (FTP).  Then relaunched  IE7 and got the same result only for HTTP. HTTPS and FTP tested OK, so down to a problem only with HTTP.  Then I ran

FIREWALL.CPL/ADVANCED/RESTORE DEFAULTS/YES and NETSH FIREWALL RESET.  Still getting same results for HTTP.

Suspecting possible a Registry problem, I did a SYSREM RESTORE for the system back to the day before the problem occured when  everything was working fine. I also

removed  AVG from Start List and rebooted.  Still get the same results out of IE7 and OE.  I ran IPCONFIG and everything looked fine. I Pinged the DNS servers and that

went fine.
Now this is interesting:  If I start IE7 and try to go to HTTP://www.microsoft.com  I get the now normal results of not working.  If I change the URL to

HTTPS://www.microsoft.com it starts a session and will stay and run normally on that site.  So the secure site seems to work.
 
I then installed Firefox 3.0.3 and fired it up.  Immediately got a "Page Load Error - Connection Interrupted.  The connection to the server was reset while the page was

loading.  The Network link was interrupted while negotiating a connection."  Retrying gives the same results.
 
I have found several Registry Cleaners advertise to fix this problem (HTTP:12031)   but since I system restored to a day prior to the problem and am running with that version

of the registry I suspect that might not fix the problem.  I rebooted the router anyway but did not expect any change and got none.  I can run in a IE7 in a stable manor for

long periods of time when connecting to a HTTPS site. (This seems to tell me my wireless hardware and connection is good, as it always has been.)  

Attached is the result of the Network Diagnostics for Windows XP

There probably is some additional clues in the attached  Diagnostics but I am not sure how to interpret it.

I realize this is a long explanation of the problem but all these different things don't add up to me.  
I am not sure what to try next.