Yes, a printer attached to one computer can be "shared" over the network just as folders can. Make sure that both computers are in the *same* Workgroup; the default for XP Home Edition is MSHOME, for XP Professional and Windows 7 is WORKGROUP. I personally prefer to use a name of my own.
If you haven't already done so, install the printer in the XP Laptop (including physically connecting it) as though it were to be used with that computer, then re-connect it to the Win7 Laptop.
In Win7, open the "Devices and Printers" folder and click your printer to highlight it. Right click and select "Printer Properties" (not the bottom Properties option) and then the "Sharing" tab. Tick the box for "Share this printer" and give it a Share Name. Also tick the box to "Render print jobs on client computers". Click OK.
In the XP Laptop, go into "My Network Places", make sure the folder tree is displayed in the left pane and expand the tree to display the Win7 Laptop - see screenshot click here - then double click your printer in the right pane. This should install it as a "network printer" in the XP Laptop, which will now have the printer installed twice - as a Local printer and as a Network printer.
You should then be able to print over the network provided the Win7 Laptop is running with the printer switched on.
Whether the Laptops connect to the router "wirelessly" or by ethernet cable is immaterial, they will still be networked.