When the #twatch first powers on, it shows these network settings:
IP: 169.254.1.1
Subnet: 255.255.0.0
Gate and DNS: 169.254.1.1
Most home network IP addresses are in the 192.168.1.x range. The #twatch contacts the DHCP server on your network to get the correct settings.
We used these 'strange' (non-typical) default settings initially so that it's apparent when the #twatch has successfully contacted the DHCP server and acquired an IP address. It should also help diagnose DHCP issues should they occur (out of range IP addresses, bad subnet, gateway, or DNS settings, etc.).