During the installation of VS 2005, we chain in the Device Emulator which is used for developing Windows CE applications.
The Device Emulator installs a network driver which may disconnect your machine from the network. Amit Chopra, my counter part on the Visual Studio Devices team has blogged about this on the Devices Team blog:
The workaround is described in Amit's blog entry. We've received several bugs on this and still see one or two questions about it on the newsgroups every week.
The good news is that post Beta 2, the Device Emulator install has changed and removed the network driver. The refactoring has also improved their installation time from 5 minutes to 8 seconds! :)