Microsoft added Automatic Private IP Addressing (APIPA) to Windows XP to let machines on the same subnet communicate with one another when no DHCP server is available (e.g., when the server crashes). If the DHCP server isn't available to issue an address or renew a lease, APIPA assigns a random IP address from the range 169.254.0.1 through 169.254.255.254 to the host. Although this feature can be useful, it can also prevent systems administrators from detecting problems in a timely manner.
To disable APIPA, you can edit the registry to change the IP address to 0.0.0.0 when no DHCP server is available. Start a registry editor and go to the HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\Tcpip\Parameters\Interfaces subkey. Select the string that identifies your adapter, and create a new DWORD Value. Name the entry IPAutoconfigurationEnabled, and set the value to 0. If you have multiple adapters, repeat the process for each adapter under the Interfaces subkey.
—Emmett Dulaney
edulaney@iquest.net