Do you see any ping numbers in the "Ping" column? If not it is likely an
issue with your firewall. (You said DSL, I assume you have a
router/firewall) It is possible to get to the arenas and chat without
properly configured IP/firewall issues, but they must be setup correctly to
race. Make sure that you have "Find addresses another way" checked in the
multiplayer "Configure" option.
Check out the readme.txt files in the N4 directory, they have some info on
Linksys routers and how to setup port forwarding so you can operate behind a
firewall/router.