Getting Mac OS X Panther Server to serve up private IP addresses to local clients via NAT and DHCP is a royal pain. Ironically, this same task couldn’t be easier to do on the regular, non-server version of Panther. Go figure.
Luckily, Glenn Fleishman saved us all a lot of headaches by posting a detailed tutorial. The only thing missing from his otherwise excellent docs is that in Step 3, right before you click “Save,” you must check the “Enabled” checkbox next to the private subnet range in Server Admin > DHCP > Settings > Subnets > 192.168.xxx.xxx.