what kind of router do you have? Airport? Mostly they come with DHCP running on them already (in fact for some wireless routers, they won't let you connect to them unless you ARE using DHCP)
Yes, definitely, in Net Prefs, set it to DHCP as your first option (you only go to Manually when you're desperate or you've got a specific reason for doing so)
Even if you want specific clients to have specific IPs (like when you want one to run as a web server and you want the router to pass all http requests thru to that client), you're better off setting this up in the router configuration (my Netgear has a DHCP tab for Address Reservation) whereby you tell it to assign a specific IP to a particular client (identified by its MAC Address) when it connects, and leave the client set to DHCP