I can't help with setting up the static IP because I've never done it. But, I can advise you on the router issue. You will need to use an IP address not in the router's DHCP range. I think normally the router will be set up to dish out IP addresses starting at 192.168.1.2 (assuming the router itself is 192.168.1.1). If that is the case then change the start address to, for example, 192.168.1.3 and then use 192.168.1.2 for your computer. Though, as stated above, it would probably be as well to add a DHCP reservation on the router and let it take care of it.
This is all amusing that your router is acting as the DHCP server as it is on most home networks.