I just use TCP/IP addresses in the 192.168.0 range. I assign the numbers manualy although the ADSL router is a dchp server. I do this as some machines, eg my webserver need static addresses. Of course I could just plug a box set up to "automaticaly get settings from dhcp" in and it should work fine.

My own feeling with dchp is that it probably comes into its own where you have a bank of machines where you don't care what IP addresses they are assigned and certainly don't want the hassle. On a small network like mine (5 machines) it's easy enough to manage even it involves local host files. (Although of course if you are using ICS [and maybe other sharing things] as your means of Internet sharingyou have no choice in the matter).

The nework has both file sharing etc. and Internet access. This Linux machine I'm on now is part of a Windows workgroup. This is done by running Samba. My Linux machines share folders with each other using NFS. Under NFS, I can if I want to decide which specific hosts should be allowed to share what - not sure if I can do that with Samba - I've never needed to look that far.