Peer Guardian is highly recommended. Launch it before starting LW. I'm not familiar with Blocklist Mgr, but the name sounds promising. It may not be necessary to run both.

The RIAA seems to have changed their tactics, since the prosecution of un-authorized file-sharers did not have enough deterrant effect. We should expect deals being made with ISPs to limit p-p.

I use IE7 to search many torrent sites, no problems so far (but I haven't gone to e-donkey or Warez - and suggest you don't either). Still, I wouldn't be surprised if MS is the culprit here. (Again I am tempted to dump everything MS and switch to Linux.)