I am not actually sure where the problem is here?

My NM can do this without any problems (0.8.1 on Ubuntu Maverick), and I
use it all the time.

In the nm applet just go to the tab for wired connections, edit your
eth0 (or whatever connection), ipv4 settings, and choose "shared with
other machines" (my ui is german, so cannot state the exact name of that
option).

If you now connect another device with direct cable, your PC will then
act as DHCP server for this other device and offer it an ip address over
the direct cable.

If the other device offers ip addresses, simply leave your computer on dhcp.

The third option possible is "link-local" which might enable direct
connections to devices that cannot request an ip address as dhcp client.

cheers
sven





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