I'm not sure if someone has come across this issue earlier or not ...we upgraded to QTP 10.0 from QTP 9.0 few months back and at that time we did some basic recording to check but in the script it wont show the Navigate URL or sync code, so based on the suggestions I uninstalled and reinstalled again the QTP 10.0 and also applied various patches from HP and then it was working as normal.
But now my issue is it does not navigate to the URL, I have been experiencing this issue from last few days or so I see that it opens the IE browser but when it has to navigate to that particular URL it does not navigate. However its strange sometimes it navigates properly and sometimes it does not. Not sure whats the reason. And other thing is when I keep a debugger it opens and navigates correctly.
I observed this when I had a driver where it was supposed to close the existing browser and navigate to another browser. It will open the IE and then stays there nothing happens and hence script is failing.
What version of IE are you using. I had to make sure to have the Enabled 3rd party extensions check in the settings for it to work properly... I was getting the same results with IE 8 & 7 you were until I checked this in internet settings.