am i right in thinking you would need to use a crossover cable and set up the computers to share files? then enable internet sharing?
here is a guide on how to set up the the laptop
http://www.online-tech-tips.com/cool-websites/home-computer-router/
then follow either of these which are quite in depth
http://www.practicallynetworked.com/sharing/xp_ICS/index.htm
http://support.microsoft.com/kb/306126
both the above guides are for xp and may not work for windows me ( i cant remember if it had a network connection wizard) in that case
you do need to use a crossover cable and can setup the two computers manually to share the internet connection and also all files and folders ( i havent tried this but it should work as connection on the second computer is pointing to the first as the default gateway)
connect the two computers together either with a Crossover cable
Set the IP address on both computers.
Goto Start > Control Panel > Network Connections
Look for your Local Area Connection ethernet adapter, right-click and choose properties.
Select Internet Protocol TCP/IP and choose properties.
Setup the IP as 192.168.0.1 and the subnet mask of 255.255.255.0 on the first computer and 192.168.0.2 on the second with the same subnet mask (255.255.255.0). and put 192.168.0.1 in the default gateway box.
Choose OK then OK/close again.
you may or may not need to enable file and printer sharing and net bios over tcp/ip
which can be done from
local are connection properties > internet connection tcp/ip > properties > advanced > wins tab > netbios options should be here and turn it on
there should also be an option for lm hosts i think you may also need to make sure that the box is ticked ( its may already be ticked)
again this may not need to be done as this is usually only used for sharing files to both computers
but try it with it on first then turn it off if it works
you will then need to enable internet sharing in the internet connection properties,
this may also become annoying if you have to manually configure the ip as you will more than likely have to switch the ip settings back to automatic if you want to use the ethernet ports on either computer so you can use them on a another connection (for example the gateway computer plugged straight into a router) and reconfigure them again to use the laptops internet connection.
hope you get it sorterd