http://www.howtoforge.com/set-up-ubuntu-server-with-ehcp-lamp-dns-ftp-mail-p2
nano /etc/network/interfaces
# The loopback network interface
auto lo
iface lo inet loopback
# The primary network interface
auto eth0
iface eth0 inet static
address 192.168.1.254
netmask 255.255.255.0
network 192.168.1.0
broadcast 192.168.1.255
gateway 192.168.1.1
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I replaced allow-hotplug eth0 with auto eth0; otherwise restarting the network doesn't work, and we'd have to reboot the whole system. I have to thank Falko for this great tip!
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nano /etc/resolv.conf
nameserver 192.168.1.1
You have to restart networking to apply the changes:
/etc/init.d/networking force-reload