Sometimes when I restart my computer, my DHCP connection is detected, and I can connect to the Internet. But at other times Internet is not accessible. I try ifconfig all the times. My network is always detected and is active (eth0). MAC Address is shown correctly. Which means that my network card is always detected correctly. But when I run dhclient3, or just try to ifdown then ifup, sometimes I will be able to connect to the server, while sometimes not.

The same problem was experienced by me when I was using static addresses. Sometimes my net was working, sometimes not.

Now-a-days it hangs aroung while saying DHCPDISCOVER on 255.255.255.255 ..... and it can't get the IP address. Although when I reboot to windows98, its all ok. Please tell me the solution as I want to completely remove windows from my PC.

Are you using a router and limiting the number of ip's it gives out? If so I had a similar problem when I switched to Debian. For whatever reason, after a reboot I couldn't get back the previous ip address. I went through all sorts of lease settings, etc. It just kept giving out the next higher IP and if I used static IP, I was up a creek and if DHCP the router was limiting them (by my choice to troubleshoot this) and I would run out after a few reboots. In my case when I removed dnsmasq all was well. If you don't need it you might try removing that package. Keep track if it tries to remove anything else! I also removed dhcp SERVER since I only need the client.

Here is my configuration.
I am connected to a cable network. Each user is given a fixed bandwidth of 80Kbps. Each user's MAC address is the binding element for this limit. Now when I run Ubuntu, sometimes it detects the network and all is ok. But most of the times It will just tell me that, eth0 is up and running, but I have no IP. If I use ifdown and ifup then ifup will say DHCPDISCOVER messages. but no dhcp is discovered. But at the sametime if I restart into windows, all is right.

well, with me the fix seemed to be the removal of dnsmasq that caches IPs I think so if my router limited the IPs or I set static ones, it couldn't get it back on the next reboot. I too, had no problems in windows but boot it very rarely.

I had not installed dnsmasq first. The problem was there. After that, I read somewhere that Ubuntu faces the connectivity problem, and the solution is to install "pump", "dnsmasq" and "resolvconf". I installed them all, and the result is still the same.
Anyways, thankyou for all the support you have given. Please inform me if you find anything useful in this regard. You might contact me at aliasgherman@yahoo.com.