If you use a dial-up connection, IE defaults to "modem." Unfortunately, when it does this, it can't see the web server on your own machine.
Open IE, go to Tools / Internet Options, and on the Connections tab, make sure you are using a default connection of Local Area Network (LAN). You can still have and use a connection to your ISP, but IE will not look for that first before trying to connect to your own web server.
The only side effect is that you can no longer rely on IE to automatically dial your ISP for you. Though, I can't imagine many of you are still using dial-up anyway, unless you are in a rural area that just isn't up to date.
Anyway, now you should be able to hit http://localhost/ or http://127.0.0.1/ or http://<yourmachinename>/.
If you have set up multiple web sites on your machine, you might want to make sure that your HOSTS file (not HOSTS.TXT or HOSTS.SAM) has entries for the aliases you gave your web site, and points them at 127.0.0.1 and not the external IP address you might see when you are connected (this will change, even if you have cable or DSL). The HOSTS file is found in %WINDIR%\system32\drivers\etc
If you are getting "The Page Cannot Be Displayed" errors, please see
Article #2109. While that won't fix the above, it will be extremely helpful in debugging other problems once you are able to connect to your web server without first connecting to your ISP.