AutoIP is a module that you must mount into io-pkt*. It's used for quick configuration of hosts on a small network.
AutoIP assigns a link-local IP address from the 169.254/16 network to its interface if no other host is using this address. The advantage of using AutoIP is that you don't need a central configuration server. The hosts negotiate among themselves which IP addresses are free to use, and monitor for conflicts.
It's common to have a host employ both DHCP and AutoIP at the same time. When the host is first connected to the network, it doesn't know if a DHCP server is present or not. If you use dhclient to create an alias, then both a link-local IP address and DHCP IP address can be assigned to your interface at the same time. If the DHCP server isn't present, dhclient times out, leaving the link-local IP address active. If a DHCP server becomes available later, dhclient can be restarted and a DHCP IP address applied without interfering with any TCP/IP connections currently using the link-local IP address.
Having both a DHCP-assigned address and a link-local address active at the same time lets you communicate with hosts that have link-local IP addresses and those that have regular IP addresses. For more information, see autoipd and dhclient in the Utilities Reference.