No, you change the range to a smaller one (or you could use 251-253, assuming the router is 254...).
Yes, it would appear that you are.Or am I miss understanding how dhcp works.
A DHCP server is free to hand out any address within its range to any client that requests one. It keeps a record of the ones that it has issued that are currently still valid (they have a time-validity - a still-running client will request a renewal of its address). If you've hard-wired an address into a system the DHCP server will have no idea about that and may hand out that same address to some other client - and having two interfaces on your network with the same address means neither will work.