UPDATE: See if this webpage of MVP Mike Burgess' addresses the problem:
http://mvps.org/winhelp2002/hostsfaq.htm#message
--
~PA Bear

PA Bear wrote:
> See 'Known issues with this security update > Controls that prompt before
> they are loaded' section of http://support.microsoft.com/kb/931768
>
> 1. Try opening IE in No Add-ons mode & see if this behavior persists. If
> it
> doesn't, change your IE home page to "blank" then close IE7 and reopen
> normally (i.e., with all Add-ons enabled) and see if the behavior returns.
>
> 2. If still no joy, reopen in No Add-ons mode, reset IE settings
> (http://support.microsoft.com/kb/923737), close IE, open normally and see
> if
> the behavior still persists.
>
> This is all related to a cross-site security vulnerability addressed by
> MS07-027/KB931768: http://secunia.com/advisories/24535/
>
> Also try this fix, courtesy of MVP Robert Aldwinckle:
>
> Start > Run > Type or copy/paste the following into the box:
>
> iexplore.exe -nohome -extoff
>
> [Note the spaces in the line above!]
>
>
> andy mackie wrote:
>> After installing the latest windows updates today, IE7 now dies when
>> trying
>> to start, giving a security warning about navcancl from ieframe.dll.
>>
>> I've saw a couple of other posts suggest it's KB931768 that's causing the
>> problem.
>>
>> Doing a system restore to before this update got things working for me.
>> Any
>> idea as to what the problem is ?
>>
>> Thanks,
>> Andy Mackie