I resolved the issue.  IE7 had marked all of the files in my dotnetnuke folder as unsafe because they were downloaded from the internet.  I unblocked the files and everything works perfectly.  Thanks. 

BTW dotnetnuke is a sweet product.

I'm replying to this thread as I have a similar problem.

The standard menu with the out-of-the-box skin wasn't working, neither was FCK Editor.

I reinstalled the website using localhost instead of the host header and it all worked, I added a new host header to the portal alias table and can access the site from this header but the menu and FCK editor is broken, I get "done but with errors"

Any ideas?