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I could find some information in the Internet but it is hard for me to understand this information because of usage of technical words. Could somebody, pleas, help me with that?

Did I correctly got it?

Firs, link-local address is alway an IP address. Moreover, it is always in the range from 169.254.1.0 to 169.254.1.0.

Second, the link-local address is alway assigned to a device by itself. In more details, device chooses an IP address (from a specified range) and send this IP to other devices in the network. If this IP address is not occupied by other devices, it will be taken by the considered device. Is it right?

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Link local addresses allow machines to automatically have an IP address on a network if they haven't been manually configured or automatically configured by a special server on the network (DHCP). Before an address is chosen from that range, the machine sends out a special message (using ARP which stands for address resolution protocol) to the machines on the network around it (assuming that they also haven't been assigned an address manually or automatically) to find out if 169.254.1.1 is free. If it is, then the machine assigns that address to its network card. If that address is already in use by another machine on the same network, then it tries 192.254.1.2 and so on, until it finds a free address.

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Is any machine able to send out a request using ARP (printers, PC, laptops)? How it starts? I mean, network appears when 2 machines get connected. They will send ARP request to each other? What if they send a request simultaneously? They both get 169.254.1.1? –  Roman Mar 2 '10 at 15:37
    
Yes, any machine capable of TCP/IP network communication uses ARP. Networking is composed of seven layers, with the seventh layer (the application layer) being the one that most people are familiar with. ARP sits at layer 2 which is known as the data link layer. It's just above layer 1 which is the physical layer (the actual hardware). I'm not a networking expert, but I think that ARP happens before any IP addresses are assigned. Which means that all the communication at that point is done via MAC address. –  George H. Lenzer Mar 2 '10 at 15:49
    
ARP requests can and are sent by anyone. In fact, they're a normal part of an ethernet network. And they aren't sent 'to' anyone. They are broadcast. It's essentially a way of shouting "Who has this IP?" to the entire network. –  Christopher Karel Mar 2 '10 at 15:50
    
If you use a sniffer to watch network traffic go by on your network and look for ARP traffic, you'll see lots of messages that basically say, "Who has IP address 169.254.1.1" and is a machine does you'll see a response stating that machine's MAC address. This is how you keep from having two machines that take 169.254.1.1. No matter if they send messages simultaneously, one is always going to arrive before the other resulting in one machine taking the IP address before the other. I believe they also announce when they have an IP. Someone correct me if I'm wrong. –  George H. Lenzer Mar 2 '10 at 15:52
    
Link-local addresses are never chosen sequentially. They are either random or based on the hardware address. –  grawity Mar 2 '10 at 16:30
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