I would suggest that you not invest a penny more into this hole of a computer.
64 MB of RAM is, however, woeful.. but for ME? That came out in 2000 or so, so 64MB might be okay. My memory doesn't go back that far.
Try going into the device manager and disabling the dialup modem. Then make sure that the ethernet card is enabled (and has no problems). Reset all of its settings to default. It *SHOULD* acquire an address automatically.
Also, you might be having router issues. Try hooking up directly to your modem so you can rule out the router.
As far as the CD and game, it's a burned disc, so is that pirated software?? Can't help you there