Generally this error comes from an anti-virus program blocking the software from connecting, not to the internet, but to some other process via the DDE mechanism. Check your antivirus settings for any type of Software blocks or firewall issues. If that doesn't work then uninstall and reinstall the program again and see if your antivirus software then pops up with a message asking you for permission to let it access the internet.
It's also been reported in 64 bit systems when trying to run reader from within IE 8 64 bit. Some people have had success using IE 832 bit from the Program Files X86 folder. Others have not.
Also, it's been suggested in some private circles that some users began seeing this behavior (with Adobe Reader as the default) after having installed Cumulative Security Update for IE (KB978207) that was released on 21 January 2010.
I would NOT recommend uninstalling or avoiding installing KB978207 because of this! Should you have any questions about KB978207, contact MS Support:
For home users, no-charge support is available by calling
in the United States and in Canada or by contacting your local Microsoft subsidiary. There is no-charge for support calls that are associated with security updates. When you call, clearly state that your problem is related to a Security Update and cite the update's KB number (e.g., KB978207).
For more information about how to contact your local Microsoft subsidiary for security update support issues, visit the International Support Web site: http://support.microsoft.com/common/international.aspx
For enterprise customers, support for security updates is available through your usual support contacts.
I'm running Reader 9.3.2 on my Windows 7 Ultimate (X86) and have had no problems with it.
Thank you so much - the problem did relate to my antivirus software. I uninstalled Norton 360 Premier edition v 4.0 and took the computer back to its original state (it was only a week old). My Adobe problem went away. After running the computer without a problem for a week, I reloaded Norton 360. So far so good.