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Local Printer vs. Network Printer installations

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So when using the Add Printer wizard on Win 7, your two options are Local Printer and Network Printer. When you choose Local Printer, you have the option of creating a TCP/IP port and specifying the IP of the printer. If you choose Network Printer, you also have an option to connect using the IP of the printer. I guess what I'm trying to figure out is, what's the difference between the two setups, since both ways use the IP of the printer? 


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