I'm also affected by this bug (and get the same log errors) on a fully updated 
(just installed from daily-live) Oneiric system.
I have only one Netbook which accesses Wifi and one Desktop connected via LAN. 
I want to share the Wifi-Internet connection to the desktop.
The desktop (kubuntu) is set to DHCP.  But even with networking disabled at the 
desktop (by using the network-manager applet in kubuntu), the ICS connection is 
lost immediately after being established. So I guess there is not really a 
duplicate IP in the network.
The network behind the Wifi-device uses a completely different ip-range 
(192.168.1.*), so there is no way that the IP adress is already in use.

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https://bugs.launchpad.net/bugs/849297

Title:
  ICS - Internet Connection Sharing

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