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Internet Error - the server name or address could not be resolved

One of our users uses Mail Manager to process mail lists. They typically send the list to a 3rd party at another location (different company) within the program. It has worked fine until 2 days ago. He started to receive the following error whenever trying to send the file:

Mail Manager 2010
Internet Error.
The server name or address could not be resolved (12007).

We then tried to use the company's FTP site - but received the following message:

FTP Folder error
Windows cannot access this folder. Make sure you typed the filename correctly and that you have permissions to access the folder.
Details: The server name or address could not be resolved.

There is no problem with the dns on their end - and no issues with our company firewall because we can get both of these actions to work from other computers. I found a Windows Security update was automatically loaded the day before he started having these issues. I figured that was the culprit - so I removed the updates. That didn't fix it. I even tried a System Restore to a prior date, but Windows tried and couldn't do it (that's an entirely different issue that I have with the System Restore........).

He is running XP, Firewall is off, Outlook is the default Mail Client. Pasive FTP is checked for IE. Other computers at our facility can accomplish these tasks. the name resolution problem is affectiing the Mail manager program (keeps it from sending the list) and Internet Explorer (won't let it connect to FTP site). Not sure where to go next. I would re-install the Mail Manager program, but I don't think that would help.
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Chris Dent
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Chris-Dent, nice job. You forced me to think about the dns. That PC was set up with an external dns server. I changed it to an internal and it fixed the problem. The strange thing is, this PC has always had that setting - and never had a problem. Either way. Thanks.

Very odd, at least you got it working :)