Oops yeah we blocked imageshack due to spammers using the same site to host porn pics, etc. of forums just for a laugh. There are many other free host sites you can use.

If you have Norton then yes, Windows firewall should be turned off. For Norton, you can make a firewall rule to allow LW full access; Configuring Norton Internet Security

It's my guess your problem is your router; namely the 2wire. It's UPnP support is probably not good or non-existent. So my recommendation is port forwarding the device. There are 3 steps involved. The first step is the most important.

1. Setting up a static ip for VISTA (click on link)

2. Forwarding a port for LW to use: PortForward.com - Free Help Setting up Your Router or Firewall
I'd recommend ticking both TCP AND UDP. Or do a separate port forward rule for each.

3. Setting for port forward within LW, is described in step 2 link.

Some devices require saving and rebooting the device after setting such changes for them to become in operation. So check your manual or options you see.

BTW in the 2nd link, find your model, click on it, then find LW on the list and click that.