I keep getting the response, active activation context. What could be causing this?

With you giving no info at all about your system (mutter, gripe), then we have to assume a lot of things, so here goes...

Probably an issue with IE7.

Solution 1 - Switch to FireFox (solves a thousand other problems, too)

Solution 2 - Uninstall ie7, reboot, test that ie6 works fine, reboot again, then reinstall ie7, reboot, then everything should be fine.