The config as you describe it, definitely is wrong. It should be both PC's connected to the LAN-ports of the router, and the WAN-port of the router connected to the cable modem.
The best thing to do if the instructions that came with the router (on paper or on CD) are too vague, and you can't find good and clear enough instructions on the net or in the Win XP networking wizard and help, is to go to a public library or bookshop and see if you can find a book on 'making a home network'. In the library you've got a better chance to find something about Windows 98; any bookshop would be OK for Windows XP.
It's not really difficult, but you've got a lot of settings to get right. And are you sure the Win XP firewall does allow the connection?
Hope this helps,
Im trying to connect to another pc in my house for files.
desktop pc running 98..hooked up to cable modem>then Router>then pc....i have a laptop,running winxp,with wireless connection of router, when im on laptop,and use remote desktop to try and get on host pc..its says it cannot connect...wondering where the problem is?wireless?...conflict with 98 and Xp?...router conflicts..no real ip address for pcs?...i guess i could just network them, but i have never doen it i dont know how, and any online instructions are too complicated for me to understand.
id apprecaite any help...email me