"Tracing ones ip address" actually looks like he means looking up what address he's connecting from?
Easiest way to do this is check your routers config page as should tell you or if you are a modem with a direct connection get a command window up (start, run, type "cmd") and enter ipconfig (ipconfig /all for more details).
Tracing someone elses ip address as above is VERY tricky and in most cases wont help you find out who/where they are.