I had this issue also, when we installed and started running Server 2008.
It was happening with both the Vista and XP machines. I have 2 internal NIC cards in the server, one running out to the internet, one running out to the router/hub.
I ended up getting everything running by bridging the two connections. The DHCP and DNS are resolving everything correctly, best I can tell.
I dont know if this is the correct fix - but it worked for me.