You'll give yourself a heart attack.
AppleTalk and ethernet work hand in hand with each other. AppleTalk is just a protocol, like ethernet is.
There is NO conflict between Appletalk and Ethernet.
First thing we are going the check is whether or not you are using the built-in Ethernet or whether you are using a PCI ethernet card.
IF you are using Built-in:

1. Go to the Apple Menu and select Control Panels.
Now select Apple Talk and in the resulting box, choose via Ethernet. The ethernet cable should be connected to the router at this point.
2. If you get an error when you close the window, this means that the G3 is not seeing another ethernet machine at the end of the cable.
3. If there is NO error when you close the window, go to the Apple menu/Control Panels and select TCP/IP.
4. Make sure that this is set to connect via Built-In Ethernet and DHCP.
All should be well.
BUT, from your symptoms, I would say that you are using a PCI ethernet card, probably Farrallon. The driver for OS 8 does not work with OS 9.2. You will have to download, somehow, the driver for your card.
There are a couple of reasons why you would be using a PCI ethernet card. First is that the onboard ethernet failed and the other is that you wanted to get above the 10BT of the built-in. If you are lucky, the on-board still works.
Let us know what the result is.