Hi,
I have XP Pro & 98SE networked without any problems. Initially using a Netgear hub & ICS when I had ISDN.
Now with a Netgear wired, not wireless, broadband ADSL router. It all works very well. I have a 30 metre cable between the two machines.
Swapping out the hub for the router was a seamless and painless exercise.
Check what protocols you have installed
On the XP machine I have
Client for MS Networks
File and Print Sharing for MS Networks
Q&S Packet Scheduler
TCP/IP
On the 98SE machine
Client for MS Networks
MS Family logon
NETBUI
TCP/IP
File and Printer Sharing for MS Networks
Both machines have Netgear NIC's
either FA310 /311 or 312's
The Netgear ADSL router has a mains switch which I find very useful as I can simply switch the router off and be totally disconnected and protected from the outside world.
Either or both machines can connect and only need the router switched on. The router has an internal Firewall, I should be able to get by without a software Firewall but use Zone Alarm Pro & free on the machines.
I can also unplug the modem connection and have not Internet connection and do anything I need or want to on the network without any worries about being connected to the Internet.
I can even disable the Firewall as I don't need to worry about having it running if I have no connection.
hth
Ceri