Internet speed is not affected by getting an IP from DHCP or manually assigning it. There is not enough information in this post to assess why a DHCP attempt is failing.
If this is a home router, power cycle it. Those things get cranky, especially with age.
If you really want to investigate, some things that you'd need to know:
* If you assign yourself a manual IP and default gateway, can you ping your DHCP server?
* How far does the DHCP request get? (Where does it fail? Is the DISCOVER never acknowledged, or does it fail later?)
* Is the DHCP request succeeding, but sending back invalid information? (I've seen bogus netmasks given back by DHCP servers.)
The 169.xxx.xxx.xxx is probably a link-local address (I'm guessing, since you masked out too much information...) If this is a link local, it'll be 169.254.???.???. Link-local addresses are usually found when DHCP fails - they're a last ditch attempt at getting an IP, but they won't get you internet. (You probably lack DNS, and link-locals can't be routed to the internet)