|You have several choices in setting up a LAN but the simplest would be to install a wired/wireless SOHO router.|
You connect from modem to router then from router to each client PC. Preferably using a cat5 ethernet cable to the PC in the same room as the router and wirelessly to the PC in the other room. That system would need to be equipped with a wireless NIC. XP help & Support has a networking walkthrough.
Goin' Fishin' (Some day)