IE7 Stopped working after installing MS Office 2003 !

I'm trying to get a new system up and running.
XP Pro(SP2) installation is OK the automatic updates added about 64 critical updates (one of which was IE7) after initial installation of XP.

I then proceeded to install programs:  Each time a program completed I tested it and previous programs, also testing IE7 each time..

I then installed MS Office 2003. I then tried IE7 and it launched OK but the first tab says "Connecting" and nothing ever happens after that.
Task Manager report IE7 is "Running" I expected to see Not Responding" but it does in fact respond to some menu clicks.

However it never displays any pages (example microsoft.com) and clicking the System X  (top right) does not close/end the program.

I have to use Task Manager and Kill Task.

Word and Excel are working fine as are all the other programs that I installed.

FireFox works OK I can browse the web no problem.

I started to un-install IE7 and it poped up a dialog telling me all the bad things that will happen if I proceed to remove IE7 because so many programs relied on it.

My Questions:
1) Does anyone know of a fix (based upon my description of my issue) for IE7 or a link describing the same problem ?
2) If I decide to un-install IE7 will the warning message about other programs failing really happen, I thought removing IE7 will re-install IE6 ?

Thanks