Try this one:

Go to X-terminal and type the following command
ping downloads.maemo.nokia.com

It will give you a warning that you're not root, but if you happen to get an IP-address (e.g. 92.123.155.32), it is not a DNS problem. So the ping command will not work without root, so don't worry about that.

EDIT: This way you can check if the connection to the server even works.