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[b3nn0 <849297@xxxxxxxxxxxxxxxxxx>]

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

Status in “network-manager” package in Ubuntu:
  Incomplete

Bug description:
  OS:
  Ubuntu 11.10 beta 1

  Brief Description:
  11.04 worked well. With the 11.10 beta 1 release I encountered issues with ICS via lan eth0 when attempting to share my wifi connection to a desktop. Both use Ubuntu and the issue is only present in 11.10 beta 1. Everything seems to be configured correctly but I encounter the computer in which I share the connection, to be repeatedly connecting and dropping the connection in 5 sec intervals when attempting ICS with Lan from my wireless computer until I receive a bug notice when I attempt to try other settings. Everything else seems to work with Network connections except ICS. Sorry for the lack of info or logs. This was tested in the 64 bit version using Ubuntu 11.10 beta 1 - as said before the computers used were plug and play with 11.04.
  ---
  ApportVersion: 1.22.1-0ubuntu2
  Architecture: amd64
  CRDA: Error: [Errno 2] No such file or directory
  DistroRelease: Ubuntu 11.10
  Gconf:

  IfupdownConfig:
   auto lo
   iface lo inet loopback
  InstallationMedia: Ubuntu 11.10 "Oneiric Ocelot" - Beta amd64 (20110901)
  IpRoute:
   default via 192.168.1.254 dev wlan0  proto static
   169.254.0.0/16 dev wlan0  scope link  metric 1000
   192.168.1.0/24 dev wlan0  proto kernel  scope link  src 192.168.1.64
  Keyfiles: Error: [Errno 2] No such file or directory
  NetworkManager.state:
   [main]
   NetworkingEnabled=true
   WirelessEnabled=true
   WWANEnabled=true
   WimaxEnabled=true
  Package: network-manager 0.9.0-0ubuntu3
  PackageArchitecture: amd64
  ProcEnviron:
   PATH=(custom, no user)
   LANG=en_US.UTF-8
   SHELL=/bin/bash
  ProcVersionSignature: Ubuntu 3.0.0-11.17-generic 3.0.4
  Tags:  oneiric running-unity
  Uname: Linux 3.0.0-11-generic x86_64
  UpgradeStatus: No upgrade log present (probably fresh install)
  UserGroups: adm admin cdrom dialout lpadmin plugdev sambashare
  mtime.conffile..etc.NetworkManager.NetworkManager.conf: 2011-09-12T17:15:11.395570

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