What is an IP Address ?

 IP addresses are four sets of numbers occupying 32bits separated by periods that allow computers to identify each other. Every computer has at least one IP address, and two computers should never have the same IP address. If they do, neither of them will be able to connect to the internet.IP address is an exclusive number used by all information technology devices (printers, routers, modems etc).It identifies and allows them the ability to communicate with each other on a computer network. There is a standard of communication which is called an Internet Protocol standard. In general terms it is the same as your home address. In order for you to receive your mail at home the sending party must have the correct mailing address in your town.Now talking in terms of Internet the house address corresponds to IP address and town corresponds to the network on which your terminal lies.IP addresses may either be assigned permanently for an Email server/Business server or a permanent home resident or temporarily, from a pool of available addresses (first come first serve) from your Internet Service Provider.

Domain Name System (DNS): This allows the IP address to be translated to words. It is much easier for us to remember a word than a series of numbers. The same is true for email addresses.

For example, it is much easier for you to remember a web address name such as www.kumarrakesh.co.cc than it is to remember 192.168.1.1 or in the case of email it is much easier to remember email@somedomain.com than email@192.168.1.1

When you type the name of the website in the internet browser it is actually translated to its IP address by DNS server. You can also reach the same site by entering its IP directly in the browser.

 Dynamic vs Static IPs

An IP address that  could change at any time is called Dynamic. This IP address is issued to you from a collection of IP addresses allocated by your ISP or DHCP(Dynamic Host Configuration Protocol-Its a computer Networking Potocol which is used by DHCP clients to distribute IP addresses to destination hosts) Server. This is for a large number of customers that do not require the same IP Address all the time. Your computer will automatically get this number as it logs on to the network and saves you the trouble of having to know details regarding the specific network configurations. This number can be assigned to anyone using a dial-up connection, Wireless and High Speed Internet connections. If you need to run your own email server or web server, it would be best to have a static IP.

 An IP address that is fixed and never changes is static. This is in contrast to a dynamic IP address which may change at any time.
                                                               

 Most routers assign dynamic IP addresses by default. They do this because dynamic ip address networks require no configuration.  When ip addresses are assigned dynamically, the router is the one that assigns them. Every time a computer reboots it asks the router for an ip address. The router then hands it an ip address that has not already been handed out to another computer. 

Now at some places like colleges,schools or big organizations there is a single external IP assigned to a router which further routes the connection to different sections in the organization with different internal IP addresses.Internal IP addresses look like something 192.168.n.n .

Some Other Links:
Find IP of a site using Ping
IP Addresses-Network and Host Id
IP Addresses-Classes
IP Addresses-Subnetting and Gateway