When a Point-to-Point over Ethernet (PPPoE) connection is created in Windows XP, Windows XP creates both a local connection and a broadband connection. Because Windows XP creates the two connections by design, and because the Automatic Private Internet Protocol Addressing (APIPA) address is expected, Windows XP should not indicate that the local connection has limited connectivity.

However, if your computer is not configured as a PPPoE client computer and the computer obtains an APIPA address, that is a situation where limited connectivity exists. Therefore, Windows XP should indicate that the local connection has limited connectivity. For example, this might occur if a Dynamic Host Configuration Protocol (DHCP) server is not available on your network.

You may also receive this message when one or more of the following conditions are true:
1. Your DHCP server is down on a hardwired network. On a home network, this server could be your Internet service provider's server, your personal router, or your DHCP provider.
2. Your DHCP server is down on a wireless network. On a home network, this server could be your ISP's server, your personal router, or your DHCP provider.
3. On a wireless network, this message may appear when you use an incorrect Wired Equivalent Privacy (WEP) key or if you do not have a WEP key.
4. You may not have an IP address, or your TCP/IP settings may be corrupted.
5. You may be experiencing other issues that are related to your Internet connection.


WORKAROUND
Sometimes, you may receive this message even if your computer is currently connected to the Internet. To disable the message, follow these steps:
1. Click Start, click Run, type ncpa.cpl, and then click OK.
2. Double-click Local Area Connection, and then click Properties.
3. On the General tab, click to clear the Notify me when this connection has limited or no connectivity check box, click OK, and then click Close.
Note This does not resolve an issue. It just turns the message off.

If this didn't help try to turn off any antivirus or firewall software and try again.