Connect the two computers directly with a *CROSSOVER* CAT5 ethernet cable. “Internet Connection Sharing” is then enabled on the actual Internet connection in the “host” PC and the “client” PC will have Internet access provided the “host” is running and online.
To enable “Internet Connection Sharing” in Windows XP, open the Network Connections folder, right click the actual internet connection (modem connection), select Properties and then the Advanced tab. Tick the box “Allow other network users to connect through this computer’s Internet connection”.
When you enable "Internet Connection Sharing" on the Internet connection, it automatically configures the network adapter used for your "private network connection" with the IP address 192.168.0.1 and subnet mask 255.255.255.0. If you have more than one adapter available for this purpose, e.g. both a "Local Area Connection" and a "Wireless Network Connection", you will have a drop down list from which to select the appropriate adapter. The "Client" PC's Local Area Connection should be set to get its IP address automatically, which it does by DHCP from the "Host" PC. Also, if you run the Zone Alarm firewall in your "Host" PC, the Internet Zone Security level must be reduced from High to Medium or "ICS" traffic will be blocked.
This connection will additionally allow you to run File and/or Printer Sharing across the network.
If you are running any software firewalls, these need to be configured to allow access to the networked computers. This may involve adding their IP addresses in a "trusted" area.