If the touch is like the squeezebox, you want to give it the IP Address of where Squeeze center is running... ie the PC's IP Address that it's running on.
Not sure what you have for a router... there is an alternative. You router may support static IP assignments. On my linux router, I installed tomato firmware (free). From there I figured out which mac address is associated with each of my devices (PC, iPad, iPhone, Squeezebox, etc) and I assigned static IPs to each one. Personally, I found it easier then muckingaround with Win 7, and it was also easier to lock everything down. Just my 2 cents.