WiFi Connection Lost Periodically - Must Reboot iPod Touch to Restore
Numbers starting with 169... are self assigned numbers and means the iPhone can't find a DHCP server to connect to.
This used to happen to my iPhone on an earlier OS version (3 point something). I haven't seen it for a while. Switching to and from "Airplane Mode" was enough to get the iPhone to acquire a new address.

PS. Is this an answer or a comment?