My experience of reseting a router is you need a long press of the reset button - in my case with a Dlink router it was 30 seconds. What does it say in the manual?
Personally I'd try to set up from the PC running XP rather than the older one running ME.
The security code you entered was (I think) only for the WiFi part of the system and connecting by the LAN Cat 4 cable should still work.
If you set the Security over the WiFi link then you will have been locked out but only of the WiFi section which is much better set up with the LAN cable first. Once that is done you can then change to WiFi and set that up on the remote computer using XP's excellent WiFi tools.