QUOTE (nmX.Memnoch @ Mar 26 2007, 09:03 PM)

That's because there is no DHCP server with ICS.

Wrong. The computer sharing the connection also serves as a DHCP server for all the computers connecting thru it. And it works... Like half the time. If there was no DHCP server, it wouldn't ever work -- at all (unless you manually setup static IPs, which you don't have to -- even the ICS wizard sets up the clients to ask for one). The DHCP Allocator is part of the NAT/Basic Firewall service (there's also registry entries for the settings and all). Don't believe me? Try running netstat a ICS host, and you should see it listening on :BootPC and :BootPS or something similar.
QUOTE (nmX.Memnoch @ Mar 26 2007, 09:03 PM)

The 169.254.x.x series of IPs is what XP uses when it's set to DHCP but no DHCP server is available on the network.
It's using an APIPA address (from 169.254.0.1 to 169.254.255.254, B class, subnet mask 255.255.0.0 i.e. 169.254.0.0/16). Always happens when DHCP doesn't work (it's the best way to find out if it worked). No surprises here. I'm just saying that ICS' DHCP server sucks/is unreliable, that's all. That's the main issue with it as far as I've noticed (other than that it's not nearly as bad as most people tend to put it).
QUOTE (nmX.Memnoch @ Mar 26 2007, 09:03 PM)

With ICS you have to use static IPs on all of your machines
No you don't have to. You can (and I tend to, because the DHCP server sucks). But most of the time it'll work fine (it's just the initial setup that seems problematic). It's not like they expect end-users/home users to go around and start assigning static IPs (and then wonder why it doesn't work when they plug elsewhere and all). There's no reason to... Besides ICS' DHCP server being brain dead I mean.
My point was, it's not nearly as bad as most people put it, besides the DHCP server issues. He can spend the 15 minutes to fight with it, and see if it works for him. Total cost 0$. There's just no reason not to try it, especially when you look at the other options, either:
-another modem. Likely costly, if even possible, or
-3rd party software. That would most likely be expensive, heavier and more complicated (like Kerio WinRoute Firewall at 400$), and sometimes no better than ICS...