Word 2007 Hyperlink problem

[Leonard]

Hello,

I just installed Microsoft office 2007.

In word 2007, I have a problem with hyperlinks.

Step 1 : I typed in a word
Step 2 : I selected that word and clicked Insert. I then clicked Links. I
then clicked Hyperlink.
Step 3 : I then clicked 'Browse the web' icon.
I get a pop up "An error occurred while browsing files".

Actions taken : I tried fixing the issue by putting the MS Office disk in my
CD drive and clicked on Repair. It completed successfully but I still have
the Hyperlink issue.

PLEASE HELP.

Thanks