The network that is picking up ip addresses is doing so from a device acting as a DHCP server. ( see http://www.dhcp.org/ for more info )
This "device" can be a "server" or a broadband cable/dsl router. If DHCP is setup on a server then there'sa place within that service that allows administrators to setup a scope (or range) of ip addresses to use.
When you first start a client computer with a nic within, and within the network properties in control panel you've set the computer to obtain an ip address automatically, the computer will look for a DHCP server. If no DHCP server is found on the network, Windows will assign 169.254.x.x with a subnet mask of 255.255.0.0. If a DHCP server is found, then the request for an ip address is heard and a potential ip address is assigned within that scope.