If the router is DHCP server, I would re-set it first. this search result may help,
Troubleshooting ipconfig
Symptom: The Internet Assigned Numbers Authority (IANA) has reserved 169.254.0.0-169.254.255.255 for Automatic Private IP Addressing. ...
http://www.chicagotech.net/troubleshootingipconfig.htm - Similar pages
Connectivity
Ipconfig shows you lost the ip is 169.254.x.x. Rebooting or disable/re-enable NIC may reconnect to the network. Resolutions: 1. Modify hardware settings. ...
http://www.chicagotech.net/connectivity.htm - Similar pages
w2k/xp network issues
2) The ipconfig lists the ip 169.254.x.x.. Resolutions: 1) Repair it by going to the Properties of the NIC>Support. 2) Renew ip address. ....
http://www.chicagotech.net/w2kxpnetissues.htm
Bob Lin, MS-MVP, MCSE & CNE
Networking, Internet, Routing, VPN Troubleshooting on
http://www.ChicagoTech.net
How to Setup Windows, Network, VPN & Remote Access on
http://www.HowToNetworking.com
My XP Pro laptop was re-installed. After connecting to the router, it gives a
totally different IP address in the 168.xxx.xxx.xxx range. It should say
192.168.1.xxx instead. This is the first time I've come across this as other
laptops and computers I've seen haven't done this. Need help correcting IP
address! Thanks!