The problem happens most likely due to the new addition feature in IE7 in Vista - Protected Mode. Protected Mode is a security enhancement to browsing experience that minimizes the risk of getting infected with trojans or viruses and getting attacked by hackers.
Thus for the workaround or solution to the “No connection to the Internet is currently available” error prompt that occasionally appeared even when there is no problem to network connection is to try to disable Protected Mode. However, turn off Protected Mode in IE 7 will expose computer to security risk. For a better solution, try to disable UAC (User Access Control). If it works and there is no longer any no connection error, then enable UAC again. If this trick works, the error prompt likely to will not appear again.