I have two computers connected with a null modem cable, I can use the cable to play network games but I can't find a folder on either computers to browse the other computers files. Does the cable need to be setup? If so, why am I able to play games when it's not recognised by either computer?

Just so you know, a null modem connection is just about the slowest type of connection you can have between two computers. Considering how small an amount it would cost you, I would buy two NIC's (if both PC's don't already have NIC's) and a crossover cable. If you connect the two PC's that way, you would not only have greater speed between them, you would also get rid of the problem you're presently having. Have you tried connecting to the other computer using RDP? If not, give that a try. Barring that, you could also try mapping a drive directly instead of browsing for the computer. Say for example on PC1, you have a shared folder called \temp you would map a drive to: \\pc1\temp See if either of those methods work. I have my doubts though as connecting with a null modem cable differs from connecting via a network interface. For one thing, you don't use TCP/IP addressing. Back in the old days (ie: DOS - pre Windows days) you used special software to connect with a null modem cable. Truth be told, it's been so long since I used that method, I don't even remember how or what software was used.

I have the xp computer connected to a laptop with an ethernet cross over cable, I didn't have another ethernet cable so I used a serial cable. Your right, it would be better to have the computers connected with an ethernet cable, if I wanted all three computers connected together would I need router?

... or a simple hub Despite claims to the contrary, posts are not routinely removed from Computing.Net

If you want them to access the internet, then you would definately want a router. If this is a simple home network and shared internet isn't a consideration, then a hub, or preferably a switch would be all you need.