Can't access internet with #2 PC

I have a problem hopefully someone can help me with. My 2nd computer cannot get internet access. I am connecting through a Network Everywhere NC41 router. One of my pc's connects fine. They both are running XP. I replaced the cable on PC#2 and it still doesn't work. When I statically assign an IP address, I can share files between the two PC's but cannot connect. If I set it to obtain an IP automatically I can no longer 'see' PC#2 from PC#1. Also the DHCP table in the router will only show PC#1 when I have it set to automatically see the IP. If I have it set statically, it will show up on the DHCP table but the computer name is 'unknown'. The link light on PC#2 is on. Any help with this would be greatly appreciated.

PC #2 when set to auto was 169.245.x.x. I did finally fix it. I did some more research and came across a program called winsockxpfix. I ran that and it now works again! Thanks for your help though.