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Your PS3 is unable to connect to the PlayStation Network because of a problem with your router. This is either because of a security WEP or WPA2 Code that wasn't identified in the Network Settings, or your router is blocking the connection. Yeah, I know, it's a bit pesky isn't it?
Without knowing your router make and model, all I am able to do is direct you to a web page where you can locate your router and the port ranges to be placed in the Admin Panel. Goto http://www.portforward.com, locate your router, then select Playstation Network and follow the step-by-step instructions.
Try using the HEX password instead of the ascii passphrase - also try to reset your AP temporarily in order to test the connection without ANY wireless security - if that doesn't connect, then the problem probably lies in the wireless router itself.
You don't set the IP address (You can but that's a whole nother story, IP address' have to be unique to the device), you need to let your router assign one automatically. Two devices on the same network can't have the same IP address or it will fail to function completely.
You need to match the security settings on the Wifi router. I do not know what security is set up on your Wifi, so I cannot accurately solve this problem. I have my router set to WEP with a passcode. On the PSP, I tell the network setup that the wifi is WEP and put in a passcode to match the Wifi routers security. If you have the passcode wrong, the IP address part will fail. Just find out the security type and passcode, then set up the PSP's network connection to match.
If you are connecting to a wireless network, make sure that you change your settings on the Xbox to DHCP so that the wireless router will give one out to the Xbox automatically. This way you don't have to know what the ip address is, the router determines it for you.
your router is locking it out. if you don't know much about routers try unplugging it and your modem for 20 seconds, that should do the trick. also reset your network settings on the xbox by going into the networking blade and clicking on reset to factory. good luck!
Connect it to your router with an ethernet cable.
Make sure the router is setup correctly to your modem, if you can
connect all your devices by ethernet cable to the internet then it's
set. If you are using a wireless connection and if it asks for the WEP or
WPA key, make sure that you are entering the correct encryption key.
You may want to call your router manufacturer to know the correct key
for the wireless connection. FYI, it will say that the wireless network
is connected but it will still fail the IP Address.
If you have a wired connection and the IP Address or DNS failed, I
suggest you to call your Internet Service Provider to check for the
Internet connection and obtain these (static IP address, subnet mask,
default gateway, primary DNS server and secondary DNS server). If your
Internet is okay, enter the IP settings manually on the console (System
> Network Settings > Edit Settings > IP settings).
First of all, how is your network configured? Are you behind a router? What's it's IP adress, does it act as a DHCP server?
If so try to set up a new network connection and put everything to automatic.. When the routers acts as a DHCP server it will give the PlayStation 3 an IP adress. DNS however is something else. DNS is a system that allows you to browse by a website or hosts name. For example: it allows you to type www.google.com in your browser instead of it's IP.
DNS is essential for Internet. Your router should be your DNS server and your router itself also needs to know a DNS server, this would be the server from your ISP. All these settings are automatically configured via DHCP.