No. It should prompt you to renew it, but not just do it, since IP address conflicts probably mean one end is badly configured.
That said, I agree that it should suggest renewing the DHCP lease.
If the DHCP is set to serve a static IP for the MAC, the problem will presist, if the DHCP server is dynamic it will just do what its desgined to do and assign a unused address fixing the problem while not changing the network configuration at all.
[0]: http://www.amazon.com/The-Inmates-Are-Running-Asylum/dp/0672...
Does anyone know what the iPhone/iPad/etc. do in this case?