There's nothing weird about this IP address.  It is part of the standard
automatic IP range used on local links.  This is defined in RFC 3330.
> 
> 169.254.0.0/16 - This is the "link local" block.  It is allocated
> for communication between hosts on a single link.  Hosts obtain these
> addresses by auto-configuration, such as when a DHCP server may not be
> found.
> 
Since you are not likely to be running a DHCP server, and probably
haven't set IP addresses for both sides of your ad-hoc network, a
169.254 ip address is used to facilitate the connection.


-- 
MrC
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