Windows Virtual PC built-in DHCP server and ISA 2004
I was setting up a test Windows 2003 domain network to play around with it. One of servers is a gateway server – hosting ISA 2004.

However, I found an issue there – the “Internal Network” card did not get IP address from DHCP server (installed on domain controller in the local network), but instead an address from APIPA pool.

The weird thing was, it said “Assigned by DHCP”, and the DHCP server itself had an IP address from APIPA range.
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I tried pinging this DHCP, sniff it etc. but with no results. Then I found some hint about a built-in DHCP server into Virtual PC. This DHCP server replies faster than my DHCP server on virtual domain controller, so it always won.
To remove this problem, you have to modify the System Policy Rule called “Allow DHCP replies from DHCP servers to ISA Server” to not allow the built-it DHCP server. To do this, go to ISA Server Management -> Firewall Policy and click “Edit System Policy” in Tasks pane. Go to DHCP rule (first one) and add a new exception.

Create a new computer with IP address 169.254.0.1 and add it to excetions. This way the built-in DHCP server will not be allowed to assign IP address to your virtual NIC and it will get the IP from other DHCP servers in your network. Which is exactly what we wanted.
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