SMS will not automatically configure it's IP address from a DHCP (Dynamic Host Configuration Protocol) server, such as the DHCP server normally found running in wireless access points etc. SMS requires a static (or manual) IP address, set in mc0:/SYS-CONF/IPCONFIG.DAT, (see Section 2.6.1, “ Network Configuration ”).
This does not mean that you need to disable DHCP and make your whole network run on static IP addresses. All you need to do is check the configuration of the DHCP server, and manually set your PS2 IP address to be compatible. Most DHCP servers will have a range of IP addresses that they will assign to DHCP clients (for example, my linksys WRT54G access point assigns IP addresses from 192.168.1.100 to 192.168.1.254)
As long as you set your PS2 IP address outside of this range (e.g. 192.168.1.22), then SMS will run happily alongside your DHCP clients. You may need to adjust your DHCP settings by changing the start IP address if there is not already a range you can use.
Of course you need to make sure that the IP address you use is not used by any other nodes on your network (such as PCs, other PS2s, or the access point itself), and the PS2 must be on the same subnet (i.e. the first 3 numbers of the IP address must be the same as other nodes on your network).
If you are not sure whether you've got a DHCP server or not, go to
a command prompt, and type
ipconfig /all. If
you see a DHCP server listed with an IP address, then it means
you have got a DHCP server running.
You can usually access the configuration settings of access points
by typing the access point IP address into a web browser.