I have been able to recreate the problem. Yes... if you open up your minimized windows one by one you'll find that one of them is holding the task bar open. Must be a bug because I can't think of any reason why anyone would want this behavior.
Whenever you get an ip address that starts with 169.254 it means that you've got a "self assigned" DHCP address. In other words, Windows sent out a DHCP request it did not get a response so it just assigned an address to itself. It's' kind of retarded if you ask me. It sounds like you're not...