a few tweaks to try;
1. the little yellow exclamation mark next to the tab, "WAN miniport (atw) #2" means that the device driver is damaged.
right-click the WAN miniport entry, select Properties, Driver tab, click Update Driver button.
select "Install the Software Automatically".
2. if you are not using a WAN (Wide Area Network) then you could uninstall the device instead;
highlight the device and click the Uninstall button.
3. if you are using a crossover cable (xmit and receive have to cross over to each other) then try looking at creating a bridge.
check Help in XP to see about bridging.
4. make sure that network cards on both machines are set to the same speed (10Mbps/Full Duplex).
5. in the advanced tab of the network card properties select the right connector type.
6. see how the term "unplugged" is used in this link:
http://computing.net/windowsxp/wwwboard/forum/53135.html
let us know what worked for you...