i assume you have a router and that you can plug in both computers into the router. Setting up in wired mode is safer and easier than wirless. Do wireless last.
Begin with Start, Settings, Network Connections, Network setup wizard. Usually it does a fairly good job of what you need. Read their descriptions of what a home network is about. Make sure to not confuse ICS (internet connection sharing) with something like "every computer connects to the internet through a residential gateway", a better method in my opinion if your ISP allows. Make sure every computer has a different name, but both computers must share a "workgroup" name (default is MSHOME). Share folders. Share printers. Share drives, though I haven't done the printer nor an external drive. Sharing is setup in Windows explorer, right click, properties, and find the Share tab and follow instructions.
Finally, I bet if you search this site, you'll find a good tutorial
also wikipedia has suggestions. But you might start with these twohttp://www.bleepingcomputer.com/tutorials/all-about-networks/http://www.microsoft.com/windowsxp/using/n...up/default.mspx
Enjoy! It'll take couple hours of mistakes but can be done
Edited by tos226, 21 May 2007 - 09:44 PM.