Your dad's PC must have IP Routing enabled. It's an option in RRAS, and there's a reg key you can use to enable it as well, if you need that.
:edit: oh, and is your DNS server set to your Dad's machine? There may be configuration errors there. If you weren't running AD, I would say switch your DNS servers to your ISPs, but that really degrades the performance and features of AD if you do that.
If he can ping by name, then I would say that he has proper name resolution and the ability to pass info out of his LAN. Check Internet Explorer on the client to see if there are any proxy settings or some such. If there are, make note of them and then remove them and try getting out again. If you can resolve a name and ping it, then you shouldn't need to use a separate proxy config for your browser.