Ensure your ICS host is correctly configured by disabling ICS then re-enabling ICS. When you re-enable ICS Windows2000/XP should inform you that it changed the IP address of your NIC to 192.168.0.1. You must leave this information alone on the ICS host. There should not be a gateway or DNS server addres on your NIC which is shared on your PC acting as the ICS host. If information is incorrect or doesn't correct itself, uninstall and reinstall your TCP/IP protocol on your ICS host.
Confirm that DNS is inoperative on your DHCP client.
To confirm that DNS is inop on the DHCP client for the ICS host, from a RUN line CMD box, type in and enter: nslookup yahoo.com
If you get a valid response with IP addresses (from DNS server and name response), DNS is configured properly and your Internet browser has problems.
If you don't get a response, then maybe your DHCP client needs to 'see' your ICS host or another DNS server as a destination. You can use DHCP on the client and still have a list of fixed DNS servers listed for the Ethernet NIC. In this case, you should enter 192.168.0.1 as the first DNS server, and if desired then each actual DNS server of your ISP as picked up by your ICS host from it's Internet connection. (You will need to see this info from your ICS host: ipcofig /all
If this still doesn't work, then your ICS host is probably not relaying/forwarding DNS traffic properly. To verify where the network is failing or to see if your ICS host is actually receiving and forwarding DNS Query/Response traffic properly, you would need a network protocol analyzer/sniffer/port monitor with WAN monitoring capabilities (including PPP or PPPoE). You may find it hard to use different versions of these types of software if you are unfamiliar with protocols and IP, but the DNS query will always have a destination port of 53, and almost always uses UDP. The DNS response will come from UDP port 53 and should go to the requesting port -- the source port. This a link to a simple sniffer that may help you out, but is limited to 14 days use (unregistered).
www.gjpsoft.com/ultranetsniffer
Good luck