A. The loopback adapter is useful for those machines with no network card but would like to experiment with installing network protocols and other network related items. Obviously since there is no physical network connection you cannot talk to other machines.

  1. Start the Add/Remove Hardware control panel applet (Start - Settings - Control Panel - Add/Remove Hardware).
  2. Click 'Add/Troubleshoot a device', and then click Next.
  3. Click 'Add a new device', and then click Next.
  4. Click 'No, I want to select the hardware from a list', and then click Next.
  5. Click 'Network adapters', and then click Next.
  6. In the Manufacturers box, click 'Microsoft'.
  7. In the Network Adapter box, click 'Microsoft Loopback Adapter', and then click Next.
  8. Click Finish.

You should then configure the device with an IP address etc. If you select DHCP it will use an address 169.254.x.x/16 (subnet mask 255.255.0.0) as no DHCP server can be contacted due to the lack of network connectivity.