Try this
I found myself experiencing this same issue about three weeks ago. Incredibly annoying problem. I now have a new modem (probably not needed) and a new ethernet card (possibly not needed).
I am assuming that your modem is wired directly to your computer. If it is connected to a router you will need to disconnect it and wire it directly to the computer. Now please do the following:
1. Click on start; go to all Programs; go to Accessories; right click on Command Prompt and click on Run as
Administrator.
2. In the command prompt window type
netsh winsock reset
and hit enter. This may take a bit of time so have
patience.
3. You will now have to restart your computer in order
for the changes to take place.
The following information is taken from:
How to change a 169 IP Address | eHow.com
4. Once you have restarted the computer go to:
Control Panel
Network and Internet
Network and Sharing Center
Change Adapter Settings
5. Now right click on the Local Area Connection and
disable it.
6. Now unplug the power to your modem. If it has a
battery backup remove the battery.
7. Leave the modem unplugged for at least 30 seconds.
8. Plug the modem back in and allow it to reset for at
least one minute. Once all the lights on your modem
are back to their normal state the modem has reset.
9. Once the modem is reset go back to the Local Area
Connection, right click on it, and select enable. Once
the Local Area Connection has been successfully
established you should be back on the internet.
A personal note:
I have DSL and I found that I had to right click on the Broadband Connection and reconnect through the box that popped up asking for my user id and password.
I am no longer experiencing dropped connections and invalid ip address messages. The new ethernet card may have something to do with it as I believe that the original problem was caused by an incompatibility issue that developed between Windows 7 and my NVIDIA nforce card. I think that it is a software issue as my computer says that the device is working properly. I tried updating the drivers but it did not help. Could be that NVIDIA needs to catch up with Microsoft. Meanwhile I have a new Realtek ethernet card that, after performing the 2 resets described above, works just fine.
