Hi Alex, 
 I still had to run around to get this fixed in karmic. It is fixed for now but 
don't know whether it will remain the same on next boot or not. 

I had to do the following.

Right-click on Network Manager 
Edit Connections 
In Auto eth1 
in IPv4 Settings 
Change Method to Automatic (DHCP) addresses only
in DNS servers change from blank to 208.67.222.222
in Search domains change to opendns.com 

I want to add another DNS server IP Address, how can I do that ?

Please lemme know if you require any other attachments.

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cannot get connectivity using /etc/network/interfaces
https://bugs.launchpad.net/bugs/287596
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