With windows 2000 the network IP 192.168.0.40 (in my case) is not enabled until like you said, the Cat5 is connected to a hub. When you ask to search the LAN, you won't find the local machine which will DirectPlay will assume to be using your LAN IP, not the localhost.

In my game i'm using Winsock TCP for the data sending and UDP broadcast for locating games on the connected LAN. I'm also experimenting using a master server(nothing special, just my computer when I'm connected to the internet), to enable locating of master servers(works by querying a perl script located on tripod via HTTP ).