Or do I have to keep it on the system for the program to function?

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why would you want to remove it? i have found that ususally is i am at home or work where the internet is working the loopback adapter can be disabled and wis will still work, however if i am not on the network wis will return errors and will not open. what you can do is go to network connections and disable the loopback adapter and see is wis still opens. if you want to remove it because of the low connectivity error that displays from the start menu, you disable that message in the loopback adapter properties.
Ray