"itunes could not contact the ipod software update server because you are not connected to the internet" Help?

Here it is:

Microsoft Windows 7 x64 Ultimate Edition (Build 7600)

LENOVO 2537FC4

iTunes 10.3.1.55

QuickTime 7.6.9

FairPlay 1.11.17

Apple Application Support 1.5.2

iPod Updater Library 10.0d2

CD Driver 2.2.0.1

CD Driver DLL 2.1.1.1

Apple Mobile Device 3.4.1.2

Apple Mobile Device Driver 1.57.0.0

Bonjour 2.0.5.0 (214.3)

Gracenote SDK 1.8.2.457

Gracenote MusicID 1.8.2.89

Gracenote Submit 1.8.2.123

Gracenote DSP 1.8.2.34

iTunes Serial Number 003DB3100363E3C0

Current user is not an administrator.

The current local date and time is 2011-06-16 17:03:57.

iTunes is not running in safe mode.

WebKit accelerated compositing is enabled.

HDCP is supported.

Core Media is supported.

Video Display Information

NVIDIA, NVIDIA NVS 3100M

**** External Plug-ins Information ****

No external plug-ins installed.

iPodService 10.3.1.55 (x64) is currently running.

iTunesHelper 10.3.1.55 is currently running.

Apple Mobile Device service 3.3.0.0 is currently running.

**** Network Connectivity Tests ****

Network Adapter Information

Adapter Name: {505BB17D-FA14-4FA0-9D77-F7998FEBB435}

Description: Intel(R) Centrino(R) Advanced-N 6200 AGN

IP Address: 192.168.0.3

Subnet Mask: 255.255.255.0

Default Gateway: 192.168.0.1

DHCP Enabled: Yes

DHCP Server: 192.168.0.1

Lease Obtained: Thu Jun 16 16:54:56 2011

Lease Expires: Fri Jun 17 16:54:56 2011

DNS Servers: 192.168.0.1

68.94.156.1

Adapter Name: {610821DE-0532-4C65-839B-B74B65859FBA}

Description: Intel(R) 82577LM Gigabit Network Connection

IP Address: 0.0.0.0

Subnet Mask: 0.0.0.0

Default Gateway: 0.0.0.0

DHCP Enabled: Yes

DHCP Server:

Lease Obtained: Wed Dec 31 16:00:00 1969

Lease Expires: Wed Dec 31 16:00:00 1969

DNS Servers:

Adapter Name: {10983C8A-FCDA-4B2F-8A89-E1596BA6B7BA}

Description: Bluetooth Device (Personal Area Network)

IP Address: 0.0.0.0

Subnet Mask: 0.0.0.0

Default Gateway: 0.0.0.0

DHCP Enabled: Yes

DHCP Server:

Lease Obtained: Wed Dec 31 16:00:00 1969

Lease Expires: Wed Dec 31 16:00:00 1969

DNS Servers:

Active Connection: Broadband Connection

Connected: No

Online: No

Using Modem: Yes

Using LAN: No

Using Proxy: No

SSL 3.0 Support: Enabled

TLS 1.0 Support: Enabled

Firewall Information

Windows Firewall is on.

iTunes is NOT enabled in Windows Firewall.

Connection attempt to Apple web site was successful.

Connection attempt to browsing iTunes Store was successful.

Connection attempt to purchasing from iTunes Store was successful.

Connection attempt to iPhone activation server was successful.

Connection attempt to firmware update server was successful.

Connection attempt to Gracenote server was successful.

Last successful iTunes Store access was 2011-06-16 15:35:33.

1. Select the hosts file (normally you can find your hosts file at C:\WINDOWS\SYSTEM32\DRIVERS\ETC).
2. Click the Edit menu, and choose Copy.
3. Then, click the Edit menu again, and choose Paste. There should now be a duplicate of the hosts file named "Copy of hosts" (Windows XP) or "hosts -Copy" (Windows Vista/7).
4. Drag the original hosts file to your desktop. If Windows needs your permission to continue, click Continue.
5. Drag the "Copy of hosts" (Windows XP) or "hosts -Copy" (Windows Vista/7) to the desktop.
6. Right-click "Copy of hosts" (Windows XP) or "hosts -Copy" (Windows Vista/7) and choose Open. You may be prompted to choose the program you want to use to open this file. Double-click Notepad.
7. When Notepad opens, click the Edit menu and choose Select All. Then from the Edit menu, choose Delete.
8. From the File menu, choose Save. Close Notepad.
9. Drag the "Copy of hosts" (Windows XP) or "hosts -Copy" (Windows Vista/7) file from your desktop back into the original location. If Windows needs your permission to continue, click Continue.
10. Right-click the "Copy of hosts" (Windows XP) or "hosts -Copy" (Windows Vista/7) file, and choose Rename. Type "hosts" (without quotation marks) and press Enter.
11. Restart your computer and try connecting to the software update server.

I'm about to try this, but I have two questions:

1.) If I screw up the process, will I have to re-install my laptop?

2.)

1. Select the hosts file (normally you can find your hosts file at C:\WINDOWS\SYSTEM32\DRIVERS\ETC).
2. Click the Edit menu, and choose Copy.

What do I copy? There are 314 items in the folder, which system file do I copy?

Yes. Nope, I got to the wrong folder, sorry. I found "etc", and with the 5 applications below.

From what I can see, the instructions are telling me to right click, select all, copy, and paste these:

hosts

lmhosts.sam

networks

protocol

services

Am I correct?

Thanks for the correction.

I'll try it out and see how it goes.

(Update on process here later)

Update #1: Apple ID works now, can access iTunes store, original problem not solved yet.

Where is the edit menu? I don't see it...

Here:

Click the Edit menu, and choose Copy.

do i open the notepad, and drag all the items in?

(sorry for this, I am horrible at step by step directions for notepad/file moving related stuff)

Yes! I see it now. thanks!

another problem encountered....I can't press the "copy" button, its in grey. Only "Select All" and "Invert Selection" are able to be clicked.

Can you help? I'm still stuck on the grey'd "unclickable" tab for edit. (conti. from above)