iMac - iMac ethernet active but not working...

I recently acquired an iMac flatscreen from a friend. He used it at home for internet access and photo storage. He was running 10.2.6. We wanted a clean OS/hard drive so we installed 10.2 from my original discs. No problems. However, when we connected an ethernet cable to the iMac we could not get the computer to recognize the connection. We updated the software to 10.2.8. Still nothing.

We pulled the ethernet cable out of my Power Book (which we know works) and put it in the iMac...nothing. Put the cable back in the Power Book...works fine. There is a hub between the modem and the computers and the hub recognizes the iMac when the cable is plugged into the hub AND when I open the network control panel on the iMac it has an ip address and an ethernet address assigned. Tried going straight out of the modem to the iMac...nothing.

Tried IE and Safari and they both return this error: "Could not open the page www... because the server www... could not be found."

We were even able to transfer files between the iMac and the Power Book using the ethernet, so the jack itself appears to be working fine but I can't figure out how to get the iMac to recognize the ethernet and use it to connect to the internet. On the "Network Port Config" panel, we have unchecked "internal modem" and "pptp" so the only option checked is the "built-in ethernet" and still nothing. Tried creating a new location and nothing.

It's almost like it's trying to use the airport or internal modem or something and ignoring the working ethernet connection.

Any help would be greatly appreciated. Have a good one!