The Internal network network in Windows Virtual PC (WVP) has a built in DHCP service that provides the clients connected to it with addresses in the 169.254.0.16 to 169.254.10.254 range. If you need to disable this DHCP service this is how you do it:

1. Shut down or hibernate all your running virtual machines
2. Wait for vpc.exe to close, it usually does so by itself a few minutes after the last virtual machine has been closed. If you don’t want to wait you can kill it in Task Manager.
3. Open the file %localappdata%microsoftWindows Virtual PCoptions.xml and find the Internal Network section.
4. In the <dhcp> section, find the tag enabled and change its value from true to false:
   
5. Save the file and restart your virtual machines.