An IP needs to be individual to a single computer... unless they were treating a neighbourhood like a network, and assigning separate network addresses to redirect the traffic into that neighbourhood. Doesn't sound like a good idea to me.
ISPs do have something of a tendency to reuse IP addresses once someone has logged off, though - especially dial-up companies.
"May the Grace of Ara go with you, and His Vengeance be wrought upon your enemies."
Not sure if it applies specifically to neighborhoods, but many larger ISPs (notably NTL) end up with IP conflicts among users because they share IP addresses. Sometimes this happens only with inactive accounts, other times with active ones. Most of the people handling join requests have figured out which ISPs do that, so players shouldn't encounter many difficulties signing up. If rejected, they just need to respond to the mail and confirm that no one else is sharing their computer/LAN and will be approved.
Comcast, for the record, has never had these difficulties, and there have been no instances of active players sharing an IP address when they do not know each other or use the same computer/LAN. This seems to apply primarily to larger European ISPs.
There is a lot of local ISP (primarily wireless or cable tv networks) in Poland that use one, sometimes more ip adresses with masquerade for their networks. Largest in my town has over 100 users on two dsl connections to larger isp and covers area inhabited by over 5000 citizens.
Users never can be sure that noone else is playing from the same ip and there is no legal way to get personal information of other people and contact them (law prohibits isp from giving that info). Other possibility to make sure who else is playing is to use sniffer - illegal too.