Both adapters need to be set to work in Ad Hoc mode, to be given the same SSID, the same type of encryption and the identical encryption key. Once this is all set up, try rebooting each PC in turn to see if it then "finds" the Ad Hoc network. It can be a bit of a pain to get it connecting initially but eventually seems to sort itself out!
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.
Once your Ad Hoc network has established itself, the "client" PC should gets its IP address from the "host".