Kazaa Lite may have installed a modified hosts file.
Look in the Windows directory, in System32\drivers\etc and there's a file named HOSTS. It's a flat text file, open it in notepad. If there are tons of entries then something has modified it. You can delete everything past the first entry, which should be 127.0.0.1 localhost. It might allow ads to appear again though if you'd installed kazaa lite or another app which blocks out ads.
But, since you're getting "unknown host", that means that your system can't find an IP address at all. If the HOSTS file had been modified, you would be finding an IP it just wouldn't work. The HOSTS file acts sort of like a local DNS server -- when you try to go to a domain name, your system looks at the HOSTS file first, and if the domain name isn't listed then it goes to the real DNS server. It sounds like you aren't reaching your DNS servers.
Check what DNS servers are listed in the non-working system, and see if you can ping the servers. Check whether it's the same servers that the other computers use.