How to turn on IP forwarding?

I'm trying to make the machine amito forward packets from machine
claremont to machine home.  Claremont pings amito and amito pings home,
but claremont doesn't ping home.  All these machines are directly
connected via ethernet claremont to amito on 192.168.10.x and amito to
home on 172.16.0.x.  I have IP forwarding turned on in amito:

	amito $ cat /proc/sys/net/ipv4/ip_forward
	1

Claremont should have its gateway set up OK:
	claremont $ route
        Kernel IP routing table
        Destination     Gateway         Genmask         Flags Metric Ref    Use Iface
        192.168.10.0    *               255.255.255.0   U     0      0        0 eth0
        169.254.0.0     *               255.255.0.0     U     0      0        0 eth0
        default         amito.localdoma 0.0.0.0         UG    0      0        0 eth0
        
and should know where home is:

	claremont $ cat /etc/hosts
	# Do not remove the following line, or various programs
        # that require network functionality will fail.
        127.0.0.1		localhost.localdomain localhost
        192.168.10.1		amito.localdomain amito
        192.168.10.2		claremont.localdomain claremont
        172.16.0.1		home home.localdomain

What have I missed?

BTW: What is the host 169.254.0.0 for?  How does it get into the routing table?

Thanks - jon