This type of software is known as a Layered Service Provider or LSP, a piece of software that can be inserted into the Windows TCP/IP handler like a link in a chain. However, due to bugs in the LSP software or deletion of the software, this chain can get broken, rendering the user unable to access the Internet.
Unfortunately, this type of software is sometimes quietly installed by unrelated software such as file-sharing programs, sneaking onto a system unannounced. In fact, in many cases, the user does not know of its existance until something goes wrong, and he/she can no longer access Web sites.
Common offenders include New.net* (NEWDOTNET) and WebHancer*, which are often bundled with file-sharing utilities, DVD player software, and other free downloads.
LSP-Fix repairs the Winsock LSP chain by removing the entries left behind when LSP software is removed by hand (or when errors in the software itself break the LSP chain), and removing any gaps in the chain.
LSP-Fix is not a malware removal utility and does not target specific products. LSP-Fix does not delete any files.
Before Downloading, read this:
There is a known issue with using this software in combination with obsolete versions of Lavasoft's popular AD-Aware utility.
A known issue in some versions of AD-Aware results in improper removal of pests such as New.Net, CommonName, and WebHancer, resulting in lost Internet access.
If LSP-Fix is used subsequently to repair these errors, the system may begin exhibiting crashes in MSAFD.DLL and/or RPCSS. This can be fixed by performing a "hard restore" of Windows' networking components. This involves uninstalling the "Communications" item in Windows setup, deleting the Winsock2 registry key, and reinstalling Communications.
http://support.earthlink.net/mu/1/psc/img/walkthroughs/windows_9x_nt/dialers/dun_1.3/5289.psc.html explains this procedure in detail.