>next I set up the localhost with "ifconfig localhost inet lo0 127.0.0.1"
>also my ethernet card with "ifconfig inet ae0 <my machine's ip> netmask 
>255.255.255.0"
>and "add route default <router ip>"

I think you need:

ifconfig ae0 inet <your.ip.number> up netmask 255.255.255.0

...Harlan