>How about
http://support.microsoft.com/default.aspx?kbid=883607 ?
No, that doesn't help either. I'm not running FP Extensions nor Sharepoint Team Services. The solution talks about opening port 80 in the XP firewall, but I'm not running the XP firewall. In fact, I did try it with the McAfee firewall turned off, but the broadband connection on, and it still didn't work. With the firewall on and the broadband off, localhost works fine.
I appreciate all your help on this, but please don't feel you need to research this for me. I can deal with using 127.0.0.1, but wanted to know if anyone else has had to deal with this problem.