Quote from a previous thread:
When you enable "Internet Connection Sharing" on the actual internet connection (modem connection) in the Host PC, it automatically configures the Local Area Connection's TCP/IP settings with the fixed IP address 192.168.0.1 and subnet mask 255.255.255.0 - you should not change these settings.
The Client PC should *normally* be set to get its IP address automatically, which it does by DHCP from the Host PC. While you can allocate fixed addresses, (a) ICS sometimes doesn't like this and (b) the Client's inability to get its IP address from the Host could indicate another issue, i.e. the two aren't communicating in the first place. Make sure that any firewall software is configured to allow access to the networked computers.
If you do need to allocate fixed addresses in the "Client" PC:
IP address - 192.168.0.2
Subnet Mask - 255.255.255.0
Default Gateway - 192.168.0.1 (the Host's IP address)
DNS Server address - 192.168.0.1 (the Host's IP address)