ip address conflict

if you change your IP settings sometimes your Windows shows that there is a
ip-conflict.. in other words it identifies that there is some other node in your subnet
which already is using the same address.How does your windows know that ?

At system startup ,when ip protocol intialize ,it send a ARP packet to other computers containig it's MAC and ip address so that other computer can update their cache.
if a computer already using this MAC address older computer will send using ARP reply to younger computer with it's MAC & ip address indicating a conflict......

The host sending the ARP packets maintains its ARP table in which a field age is specified ..if any other host tries to use the same IP its ARP table registers another MAC address of the earlier host using that IP. which has already allocated that IP ....YOU can try command arp -a and view that any other node has tried to use ur IP or not !!
A MUST READ ..PROXY ARP