All you actually had to do and I know this is a late late reply but its just in the case of letting you know how easy it really was to fix this issue what you should have done was turn the internet system icon off and back on that's what fixed this issue for me....
Red X on system tray connection icon even though I am connected to the Internet. OS is Win 7 64 bit, how do I correct this.
Red X in system tray connection icon...have reset router, restarted computer...how to correct this problem
Windows for home | Previous Windows versions | Internet and connectivity
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Try this. It worked for me.
I finally removed the security from my network and the network status now shows me as connected. The red X is gone. It seems that Windows 7 does not support WPA2-PSK. I cannot imagine that is the case. Any ideas as to why, as installed on my PC, it does not have an option for WPA2-PSK? As I said, the hardware is supported and previously worked with XP.
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Anonymous
2010-07-27T08:10:39+00:00 The problem occurred after laptop BIOS update. While looking for solution, I noticed that the tray icons are apparently cached by the system somehow. The following thread illustrates step-by-step how to purge that icon "cache":Clean Up Past Notification Icons , - it's for Vista but worked fine on my Windows 7 64.
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Anonymous
2010-07-11T08:37:58+00:00 This will sort it out:
http://www.spiders-design.co.uk/fix-wrong-network-icon-in-windows-7/
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Anonymous
2009-11-08T17:45:55+00:00 I have the same issue for Windows 7 Home Premium 32 bit: Although it says I'm connected, connection does not work and there's a red X. Both wired and wireless connections don't work.
It's not a router problem (just updated to the last firmware and it works fine).
It's not an Internet Explorer problem (in other browers it does not work either).
I have reinstalled wireless driver.