Something's adrift there. I set up a network here, with no bother at all, using Win XP on two machines and Win 2000 on the other. It was very simple. Plug it all together, "ipconfig /all" on each machine to get the network addresses, and "ping" to check they were all seeing each other. Then the Network setup as described above. Job done. Laptop works anywhere in the house or garden.
HOWEVER ... elder daughter (lives a mile away) wanted one at her house. I bought her a Belkin wireless modem router, and it just would NOT do what mine does. Eventually we found a website that explained that there's some kind of problem with the Belkin 4-port 802.11g device.
So we chopped that in and got a different brand - separate modem/router and wireless access pont (different brands, even), and her network was up and running fine in about ten minutes.
Her laptop works on either her or my network. It knows about both, and connects to whichever it sees.