If your network uses TCP/IP, you have three options for assigning IP addresses to computers on the network. First, you can assign addresses statically, allocating a specific address to each computer. This is the least attractive means because it makes network administration more difficult. When you need to assign an address to a new computer, you have to make sure it's one you haven't already assigned.
DHCP offers a better solution because it assigns addresses and other IP properties like DNS servers automatically when the computer boots. Using DHCP, however, requires a DHCP server. In a small network you might not have the capital for a Windows 2000 Server system to do DHCP. As long as you don't need routable public addresses, however, you don't need a DHCP server, because Windows 2000 supports Automatic Private IP Addressing (APIPA).
If you configure a Windows 2000 computer for automatic IP address assignment and no DHCP server is found on the network, Windows 2000 automatically assigns itself a unique address in the 169.254.x.x class B address space (subnet mask 255.255.0.0). It scans the network periodically for a DHCP and if one is found, takes an address lease from the server. Otherwise it continues using its APIPA address.
To configure a computer for APIPA, simply open the Properties sheet for the network connection, double-click TCP/IP, and enable the Obtain An IP Address Automatically option.
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