fixed. 

once I added 
nameserver x.x.x.x (router ip address) 8.8.8.8 (google's DNS server)
dns-nameservers x.x.x.x x.x.x.x (these are my isp's DNS servers)

all is up and running.

 

>
> # Wired or wireless interfaces
>
> auto eth0
>
> iface eth0 inet static
>
>        address 192.168.0.40
>
>        network 192.168.0.0
>
>        netmask 255.255.255.0
>
>        gateway 192.168.0.1
>
>        broadcast 192.168.0.255 
>        dns-nameservers 192.168.0.1 205.171.2.25 < this is what I dont 
> understand?
>
>
>

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