Sorry for the time off from the tips, bizy, bizy, bizy on non Windows Phone 7 related work. So sad :(
Anyway – here’s a quick one that might save you a little bit of time and a few gray (or lost) hair.
If you are using fiddler on your desktop machine and then fire up your Windows Phone 7 Emulator, the emulator won’t be able to connect to the internet.
Even if you quit fiddler, you will need to restart your emulator before you can connect.