Hi, I am not an expert that is why I got lost. I have ADSL router (ZyXEL Prestige 600series) and would like to create a local connection between my 2 computers. I connected them via network cable and managed to set up the internet connection between the 2 of them (PC as a main comp connected by USB to the router). I can 'see' PC on my laptop, but cannot connect to it - and I can't 'see' the laptop from the PC. Internet connection works. C drives are shared. What can I do to fix it? Maybe there is a better way to connect them (maybe using the router that I have it's adsl dual link router with 1 USB and 1 network ports)?

USB is great for a lot of things but it's not something I favor for networking. If it were me, I'd buy a small 8 port 100 Mbps switch and I'd plug it into the network port on the router and then I'd plug my PC's into the switch with network cables. If you're router is cable of DHCP, I'd set that up to dish out IP info to your PC's. This should get your LAN working the way it should be. There are quite a few web sites that give info on basic networking (ex: www.wown.com) I would check a couple out and see if you can find a fix for your present setup in one of them if you can't afford a switch. Even if you can, a good basic tutorial on network setup wouldn't hurt.

You also need to build an account for the other machine on the XP machine. If both are running XP you need to build an account on each machine for the other. Today seems like a good day to chew through the restraints.