I had this problem with WordPress 2.3.3 and I'm still facing it with 2.5.
I've traced it to the fact that WordPress uses the PHP fsockopen() function to access some resources available under the wordpress.org domain (such as the development blog feed, or the current version of installed plugins). I have WordPress installed on two of my web host's servers. One of them is working perfectly fine. The other errors on fsockopen() calls sent to the wordpress.org domain. On the same server, fsockopen() works fine with other domains. This is confirmed when I change the feed URL of the WordPress Developement Blog widget to some other feed that is not hosted on wordpress.org.
Is it possible that wordpress.org could blacklist some of my web host's servers? Of course, when i asked my web host if they were blacklisting wordpress.org, they told me that "No no no! It must be WordPress blacklisting us!"
Anyway, any WordPress function using fsockopen() fails for me with a "Connection refused" or "Connection timed out" error.
(By the way, for the original poster, old posts are displayed in the dashboard when WordPress resorts to displaying the data it has in cache.)