I have 3 users all with Dell Precision M4400 laptops on Win XP SP3 using Intel 82567LM NIC's and all with the same issue. If I unplug the network cable from the laptop and run ipconfig at a command prompt it still shows the adapter with it's address instead of showing "media disconnected" as it should. The system tray icon for the connection does show the cable unplugged message. If I try an ipconfig/release and renew it generates an 169.254 address on the adapter even though it's unplugged.
I discovered this problem because the users were complaining that when they unplugged from the network they would lose access to everything even though the wireless connection is working. Even though the wired connection was unplugged and the wireless connection was active with a valid address, the computer was still trying to route traffic over the wired connection because it still shows an IP address.
The only way I can get the wireless connection to work correctly is to disable the wired connection. I can't seem to figure why windows won't see the media disconnected state even though it shows the "network cable unplugged" in the system tray. I've updated the Intel 82567LM drivers, updated the BIOS and even uninstalled and reinstalled the drivers to no avail.
The network adapters both wired and wireless are configured for DHCP.
Any help is appreciated.