1) Not sure. I gave the guest OS a static IP of x.x.x.23 and pointed it to the Host OS (x.x.x.24) as both the default gateway and the Preferred DNS server.
For some strange reason, I have my router as my DNS. I have Verizon FIOS (their weird little wireless router w/ the Coax input). Don't know if that is significant or not.
As
Jamsan said, you have a
Bridge or a
Nat mode for your virtual network adapter to choose from, if you wish to connect to other machines on your local network and beyond.
And from the above quotes, it looks like your virtual network adapter has been setup in Bridge mode. Whitin that configuration the adapter could either receive all needed network info from your Router (as your Host does) or as you did you can hard code the ip address + Defaul Gateway + DNS info. By then all those info need to match the configuration of your Host Nic (of course the ip needs to be within the pool of your Router's DHCP).
In Nat mode however, your Guest will still get to communicate with other devices on your local network and beyond but will be more secure because it will be on a private subnet.
PS: assuming that Microsoft Virtual PC works on the same principles, virtual adapter(s) configuration wise, as Vmware Workstation.