[DM-MUG] Can't get rid of "self-assigned IP address"

[cwsmith at mchsi.com]

This is the strangest thing I've ever seen. 

We connect to the Internet via a cable modem and and AirPort Extreme Base Station. I have an ethernet 
switch in my office, with four computers connected and two cables leading to the AirPort Extreme and 
to my wife's office, respectively. 

In my wife's office is another ethernet switch (so I can bring a laptop in when necessary) connected to 
my wife's iBook G3 700 MHz. 

I've had no problem setting up my own office network (iBook G4 1.2 GHz[Tiger], PowerBook G3 
Lombard [Panther], Power Macintosh 6500 [Mac OS 9], and a PC tower [Windows XP Professional]). All 
connect via DHCP. The AirPort base station, acting as a router, assigns IP addresses in the standard 
10.0.1.x fashion. 

My wife's computer (iBook G3 700 MHz [Tiger]), on the other hand, displays a "self-assigned IP address" 
of the 169.254.193.x variety. Even under DHCP, where the router is supposed to assign the address, 
this 169.x.x.x address is displayed in the IP address field, where I can highlight, but not change it. 

Even in the days when I didn't have cable internet, when I manually assigned IP addresses, I would use 
169.254.254.x. This "self assigned address" isn't even in that range, so I know I didn't enter it. 

Even weirder: If I configure manually, the 169.x.x.x address does not show up at all. 

I have created new network locations, tried trashing the Network preferences, repaired permissions, all 
to no avail. Even in an new network location, the same 169.x.x.x address keeps returning after a few 
seconds. What the H*LL is going on here? How do I get the iBook to accept its DHCP assignment 
permanently?