Short answer - No, you do not.
Unless you want to be a server.
Long answer -
To backup and fileshare, just in both computers setup the folders to share with correct permissions for users.
Then when you want to move files etc, you will have to login to the 'other' computer using the correct user name and password (XP uses some unsafe, global thing called Guest, but 2000 has a real user list).
Also make sure not to set up domain. Make both computers members of a workgroup of the same name instead.
Microsoft defaults to MSHOME. You can call it anything you want, so long as both computers use the same workgroup name.
If you wish, permit NetBios on the TCP/IP protocol so you can see the names of the computer you assigned in the computer properties.
When, in the Network neighborhood (aka My network places) you traverse directories on the other computer, the WIndows explorer folder should then show something like
and your first computer will show
You can also map the drives, but get started with this.
If you have a firewall, make sure to permit communication and filesharing within your LAN, but not the internet.
Hope this helps some
Edited by tos226, 13 January 2008 - 10:06 PM.