If you are planning to set up a small home network or connecting your Windows 7 machine to another computer you need to have an IPv4 standard or arrangement. Typically, you may have one computer connected to the Internet which provides Internet services to the other internal computers. Windows 7 can do this role through the Internet Connection Sharing (ICS) service. Other services or devices such as, Wireless Access Protocol (WAP) in wireless networks or DSL and cable modem routers can too provide Internet services to the internal computers. On the other hand, if you are not planning to provide Internet services then you can avoid all the trouble and let the internal computers configure themselves through APIPA.
Sharing the Internet connection over windows 7 requires one computer called the host that is connected to the Internet and to the rest of the computers on the internal network (LAN). Then the computers on the network connect to the Internet via the host computer. The host computer Internet connection can be wireless, modem (Ethernet or USB), 3G card or any similar device. To use ICS make sure that the LAN connection on each computer is configured to get an IP address automatically. This includes the LAN connection of the host computer.