A direct connection to PC's LAN port does only work if you use a Crossover cable. It MAY work with a standard 1:1 cable if your PC has a fully autosense network port which support both cable types, independent of the port on the other side.
Does your router recognize the DNS-323 and hands over an IP adress? Means, the LAN port works (not disabled), the router's security settings allow new devices and the router has enough IP's left to assign.
UPnP does not *configure* the network, UPnP *needs* an already-working network configuration. All devices in the network share their capabilities via UPnP protocols - if UPnP is activated (it's turned off by default in windows).
The "Easy Search" utility is just a frontend tool to create network shortcuts on your PC. It works only if the DNS-323's network connection works AND if your firewall doesn't block the network access.
If you put in the HDs and turn on the device for the first time, the DNS-323 initializes itself and the two HD's. This can last a while (you have 2 1TB HD's ...) and might not result in the correct setup you want. But the DNS-323 needs a start.
Hope this helps you with the start.
//HSishi