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I have managed to give an AP1200 an IP using DHCP.

The AP is connected through HyperTerminal with a Console connection and LAN through the Ethernet port.

However when trying to give the AP a static address I loose connection and then cannot reconnect via the web interface.

Is there something that can be done to resolve this issue?

I would change your LAN IP to agree with the DHCP assigned IP subnet long enough to assign the 1200 your static address of choice. change your LAN IP to agree with the static address's subnet to continue configuration. You can also assign the static IP through the console interface.

D2 is correct. When you are assigning the IP address, the router is taking it which means it is now on a different subnet than your computer, which now means you cannot communicate until you configure your computer to an IP on the same subnet with which you configured the AP.