Macbook choses 169.254.x.x when the range is really 192.168.2.x We have a router/modem 2wire (with DHCP disabled) which we are just using as a modem now, wired to our Airport (with DHCP enabled). We have 5 other devices connected. One of the Macbooks is choosing an address in the 169.254.x.x range. The Airport is set to connect using DHCP and router mode: Off (bridge mode).

The Network utility says: Wi-Fi has the self-assigned IP address 169.254.104.148 and will not be able to connect to the Internet.

In the AirPort utility it says the IP address and LAN IP address of the airport is 169.254.213.128.

The wifi attempts to connect but never stops trying. The wifi bars just keep lighting up. In the network utility, it says "Self-Assigned IP"
The problem was I didn't have DCHP enabled on the Airport, but when I did, the internet wouldn't work at all on all devices, when with it disabled, it worked on some.

So I contacted both my ISP (Bell/2Wire) and Apple. I had to setup the Airport to use PPPoE and I received that information over a call with my ISP.

The quickest route was to just reset both, call my ISP for PPPoE and reconfigure both.