Can't run Network Setup Wizard

OK, I've tried for 2 week to make what should be a simple home network. 2 PCs running XP Home thru a linksys router.

Networking equipment - 1 speedstream 5360 DSL modem, 1 LinksysEtherfast Cable/DSL VPN Router w/4 port 10/100 switch, 2(1 in each PC) Etherfast 10/100 Managed Network Adapter card.

PC 1 has internet access thru router, can ping the router, can ping itself, cant ping PC #2 - problem!
PC 2 has internet access thru router, can ping the router, can ping itself, and pings PC #1 normally.

I have the firewalls turned off, the workgroup name is the same for both PCs.

For some reason - both PCs do NOT have the option to share folders in the LAN Properties Advanced Menu. The 1394 Properties do.

When I attempt to run Network Setup wizard, I get "cannot complete network setup wizard" which forces me to manually configure the network - which I haven't been able to do.

I'm pretty sure I want to set up a "Residential Gateway"type of connection, pretty sure I have the equipment, so where am I going wrong?