One of the new features in Vista is the Network and Sharing Center where you get an easy summary of the connectivity state of your computer. In particular, you can see what sort of networks you are connected to (private, public, domain) and what sort of access you’ve got (limited connectivity, local, local and Intranet).
The downside to this feature, though, is that if you are trying to troubleshoot it – for example, WHY does it say "Local only" – then the information can be a bit sparse, and the built-in diagnostics don’t help.
Take the access information as an example. Just HOW does Vista determine whether or not you are connected to the Internet? The answer lies with the NCIS – no, not the TV show starring Mark Harmon but, rather, Network Connectivity Status Indicator. Once I’d discovered what the actual feature is called, it became a bit easier to then find information about it:
and also a KB article that suggests one reason why NCIS might not work as expected:
So if you are struggling to understand why Vista is saying "Local only" on your PC, take a look at how NCIS works and see if you’ve got anything that might be blocking it.
Oh, and if you don’t want to use NCIS, or you don’t like what it does, the first link includes details of a registry key that can be set to stop NCIS. Please note, though, that this might have adverse effects on some software trying to access the Internet.