Cozzy, he´s replying to my post and I apologize for getting in the middle of your problem - here´s some more info on the original question:
OK, I think we are narrowing down the situation. However, because it's XP and I use Win 2K, I can't help you all the way.
First, when you are connecting two computers back to back, the issue is different than when you are using a router. You say you have a router, I believe the easiest solution is to use that.
In that case, the router gets the cable from the modem (there should be a plug in the back of the router marked "internet" or "modem" or the like). Then each computer has a cable from it's nic (you can't get this wrong if you are using ethernet cable) to a plug in the back of the router (since you have already plugged the modem into the router you can´t confuse this)...
Win2K (again, I don´t know about XP) almost configures itself for a local area network, so if you have your computers set up with discrete names, which has already been gone over in this thread, and you have the same workgroup set up for both, you should get a connection on both computers. While you have both of them downstairs, I would suggest you do this operation while the computers are side by side, saving yourself some stair time.
One more thing to consider. If I´m not mistaken, you need a crossover cable to connect two computers together. Using a router, you cannot use a crossover but need a ¨normal¨ cable.
There are some more steps involved to test the system but I´m not going to deal with that since you are using XP and I can´t help you on that. But if you get a cable disconnected message, you are never going to be able to do anything. And with the computers connected together like you are trying to do, there are other issues involved with sharing that can give you problems.
btw, I´m confused about you statement about dialup. I though you said in one post that you were using ADSL modem connection. There´s no dialup involved there...