169.254.0.0/16 is a much less well-known CIDR block that contains nonroutable IP addresses. This address block is best known to Windows users, as Windows picks a random address from the CIDR block whenever it fails to get a response to a DHCP request (the Obtain an IP address automatically box in the Networking Control Panel). This is known as Automatic Private IP Adressing.

DHCP Client Lease has instruction for re-asking for an IP address if this happens to you.

For those interested in these things: ARIN lists 169.254.0.0/16 as LINKLOCAL.