169.254.XX.XX

I am having problem connecting to the Internet.  The DHCP server is running, but it keeps assigning an IP address of 169.254.XX.XX.  I uninstalled the drivers to the Truemobile 1300 wireless adapter and the Conaxant modem and then reinstalled them and I still can't connnect.  I verified in the device manager that both pieces of hardware are working and I do not have the firewall running. Does anyone have any idea what could be the problem?