Fedora Networking :: Mini Webserver - Internet Not Working

Long term Fedora user, I have recently decided to set up a small shuttle computer as a media centre (using mythTV), data store/NAS (so all my data is centralized), mini web server, etc. After installing I had the fun of trying to get my audio working correctly (which I did eventually .. after finding out I unplugged the audio after the second reboot and solved it after somewhere). After this, I got internet video searching working through mythTV using adobe Flash. I then went to bed only to find the internet not working (can't telnet, can't traceroute, can't anything). This is both as the mythtv user I have set up and as root.

The setup I have is:
PC -> router -> interweb
192.168.1.7 -> 192.168.1.1 -> interweb

I also have a laptop (F12) which is on 192.168.1.5.
The laptop has access to the internet just fine (no problem at router / interweb).
I have the only access to the router and disabled any ISP access (no changes in router).
I have the only access to the PC (no changes in PC).
I have set SElinux to permissive (no selinux issues).
I have temporarily disabled iptables on the PC (not firewall issue).

So, I decided to look at the differences between my two machines on the network. Initially the PC was missing the route:
169.254.0.0 0.0.0.0 255.255.0.0 U 1002 0 0 eth0
I changed the services on startup so thet 'NetworkManager' was off, but 'network' started (exactly like my laptop). I turned off avahi-daemon, and any other network sort of daemon which doesn't match my laptop (which I have also customized).

I then set my eth0 config file to this:
Code:
# nVidia Corporation MCP77 Ethernet
DEVICE=eth0
HWADDR=00:30:1B:47:C4:FF
ONBOOT=yes
BOOTPROTO=none
TYPE=Ethernet
DNS1=192.168.1.1
USERCTL=yes
IPV6INIT=no
# DEFROUTE=yes
IPV4_FAILURE_FATAL=yes
# NAME="System eth0"
# UUID=5fb06bd0-0bb0-7ffb-45f1-d6edd65f3e03
IPADDR=192.168.1.7
NETMASK=255.255.255.0
NM_CONTROLLED=yes
GATEWAY=192.168.1.1
MTU=1432
# PREFIX=24

Commented out any lines which I didn't recognize. So, right now netstat -rn returns:
Code:
Destination Gateway Genmask Flags MSS Window irtt Iface
192.168.1.0 0.0.0.0 255.255.255.0 U 0 0 0 eth0
169.254.0.0 0.0.0.0 255.255.0.0 U 0 0 0 eth0
0.0.0.0 192.168.1.1 0.0.0.0 UG 0 0 0 eth0

/etc/sysconfig/network:
Code:
NETWORKING=yes
HOSTNAME=sophie
And to me everything looks OK.

I even have inter-communication working fine (I can SSH between the two servers no problems - 192.168.1.7 <-> 192.168.1.5). I can do DNS queries from both just fine (nslookup google.com returns fine). I just can't get any information back from the net. Would it be work me doing a tcpdump or wireshark dump etc ('tcpdump > file' would be easier for me)?