Another member posted this, but - alas - added a spam link. So I'm reposting only the relevant part of his post.
Follow this 6 steps
1. Plan your network
Decide what type of network you want. We recommend using a wireless network so that you have the option of using wired or wireless connections. Wireless connections give you the most mobility since they use radio waves to send information between computers. For more information, see What you need to set up a home network.
2. Get the necessary hardware and an (optional) ISP
At a minimum, you'll need a router and a network adapter for each computer (most laptops come with a wireless network adapter already installed). If you want to connect to the Internet, you'll need to have an account set up with an Internet service provider (ISP). For more information, see Selecting a wireless router or another wireless network device.
3. Set up the router
If your router displays the Windows 7 logo or the phrase "Compatible with Windows 7," you can set it up automatically using the latest version of Windows Connect Now (WCN) on Windows 7 or Windows Vista Service Pack 2. Otherwise, most routers come with a setup CD that will assist you in setting it up. Follow the instructions that came with your router. For more information, see Set up a wireless router.
4. Connect the router to the Internet (optional)
You don't have to do this step, but we highly recommend it. Most people find it very valuable to have an Internet connection. To connect the router to the Internet, follow the instructions provided by your ISP, or see Set up a broadband (DSL or cable) connection.
5. Connect computers and devices to the network
For the easiest setup, buy devices that display the Windows 7 logo or the phrase "Compatible with Windows 7," and then follow the instructions that came with the device. For more information, see Set up a wireless router, and refer to the section entitled "Connect other computers to the network." Also, search Help and Support for "Add a device or computer to a network."
6. Create a homegroup or turn on file and printer sharing
If you're setting up a home network, creating a homegroup is the easiest way to share files and printers. All homegroup computers must be running Windows 7. For more information, search Help and Support for "Create a homegroup." Also, see Join a homegroup and What is a homegroup?