DHCP not activated on CoovaChilli

[Theodotos Andreou]

I am not sure if this is the correct place to post problems. Anyway...

I have setup CoovaChilli on Ubuntu 8.04 based on the following howto:

https://help.ubuntu.com/community/WifiDocs/CoovaChilli

After I finish the dhcp service from CoovaChilli is not working and even 
when I put manually an IP on the client in the same subnet as the 
internal network neither the client or the server are pingable. I used 
the IP 10.1.0.1 in the internal interface (etrh1) but that IP is 
actually assigned to the tun0 interface. Is this how is supposed to be?

The dhcpif interface is set to eth1.