|I have a windows xp system on a netgear fast ethernet switch|
Do you mean a switch, or a router? A router is a diffferent cup of tea from a switch. Typical setup is as follows:
internet >> router >> client(s)
If you don't have a router, and only have a switch, then yes, you'll only ever be able to get one computer online at a time and it has nothing to do with Windows 7. Having more than one computer connect to the internet through a single IP address requires something called NAT (network address translation) which is part of a router but is not a part of a switch.
If you don't have a router, I recommend you buy one that has 4 LAN ports. Then you can have both computers connecting at the same time.
It matters not how straight the gate,
How charged with punishments the scroll,
I am the master of my fate;
I am the captain of my soul.