169.x.x.x address is a self-issued address by the TCP/IP stack on a client when it cannot contact a DHCP server to get one. Generally, it was designed this way so that it would help facilitate easier networking for people who don't know how to properly set up an IP network. Technicallly speaking, you could connect two Macs together with a crossover ethernet cable and wait until they both finally self-assign themselves 169.x.x.x addresses. Once this happens, IP network connectivity will allow for both Macs to talk to each other accross that single ethernet link.
When dealing with a WIFI network, an address of 169.x.x.x usually indicates one of a few things.
1) You somehow manually misconfigured the security type and password for the WIFI network you're tying to connect to.
2) The WIFI network you're on does not have a DHCP server to issue an address.
3) The WIFI network you're on has MAC (no, not the computer Mac, lol) address blocking turned on and doesn't recognize your network card's MAC as a valid client to allow connections.
The gotcha here is that 1 and 3 usually only happens on systems that aren't smart enough check and see if the WIFI connection has accepted the password and OK'd it. On some systems and with some older encryption like WEP, as long as the passcode matched the length of the password required, it would let you connect (or rather it would show you connected but with limited connectivity). This is the state that tends to trick people into thinking they have a good WIFI connection to the network, but something else is wrong, when in fact, they DO NOT have a working connection to the network even at the base security layer (before the TCP stack even begins binding). In situations like this, you must delete the WIFI network and (on a Mac), also clear out the Keychain entries for that WIFI network because that's where the security key is stored. Once this is done, you reconnect to the network and make sure that you're tying in the (usually case sensitive) password as it's given to you. If that still doesn't work, then test with another device. If that device works, then you're still making a clarical mistake on the password on your previous device or that device has other network issues. If the second device doesn't work either, then you've either been given incorrect info for the WIFI network, the WIFI network is misconfigured to not give out DHCP IPs, the WIFI network is doing MAC blocking, the WIFI network router is locked up and not allowing new client connections (power cycle it to fix this), or you're still somehow making a clarical mistake inputting the info for it. Pretty much all these will require you to probably talk to whomever manages that WIFI network if you still want to connect to it.